AnnuAl report 2013 - Investor Relations

Transcrição

Fashion
forward
Annual report 2013 Key Figures
EUR million
2013
2012
Change
absolute
Change
relative
907.2
629.7
277.5
44.1%
TOM TAILOR Retail
254.1
205.8
48.3
23.5%
TOM TAILOR Wholesale
302.4
270.0
32.4
12.0%
BONITA
350.7
153.9
n.a.
n.a.
TOM TAILOR Retail
28.0
32.7
TOM TAILOR Wholesale
33.3
42.9
BONITA
38.7
24.4
Cost of materials
408.2
296.5
111.7
37.7%
Gross profit
165.8
49.8%
10.7
16.1%
Revenue
Share of revenue (in %)
499.0
333.2
Gross margin (in %)
55.0
52.9
Recurring EBITDA
77.2
66.5
Recurring EBITDA margin (in %)
8.5
10.6
One-off items/special factors
13.1
11.5
1.6
13.9%
EBITDA
64.1
55.0
9.1
16.5%
7.1
8.7
28.5
34.1
–5.6
–16.4%
3.1
5.4
One-off items/special factors (net of imputed tax effects)
22.0
17.9
4.1
22.9%
thereof amortisation of TOM TAILOR/BONITA PPA
9.0
6.4
2.6
EBITDA margin (in %)
Recurring EBIT
Recurring EBIT margin (in %)
thereof financing costs/BONITA acquisition
–
14.8
thereof negative goodwill from BONITA acquisition
–
–11.1
10.7
4.4
EBIT
6.5
16.2
EBIT margin (in %)
0.7
2.6
thereof cost of BONITA integration
Recurring net income for the period
Recurring earnings per share (in EUR)
One-off items/special factors (including imputed tax effects)
–9.7
–59.9%
1.7
18.9
–17.2
–91.0%
–0.14
0.81
–0.95
–117.3%
17.9
15.8
2.1
13.3%
6.3
4.5
1.8
Net income for the period
–16.2
3.1
–19.3
Earnings per share (in EUR)
–0.87
0.01
–0.88
Cash generated from/used in operations
59.7
20.4
39.3
192.6%
Net cash used in investing activities
26.9
35.6
–8.7
–24.4%
6,499
6,133
366
6.0%
569
541
28
5.2%
thereof TOM TAILOR Retail
1,701
1,426
275
19.3%
thereof BONITA
4,229
4,166
63
1.5%
thereof TOM TAILOR/BONITA PPA
Employees as at 31 December (absolute)
thereof TOM TAILOR Wholesale
–622.6%
31.12.2013
31.12.2012
Total assets
759.6
771.2
–11.6
–1.5%
Equity
221.7
218.9
2.8
1.3%
29.2
28.4
Equity ratio (in %)
Return on equity (in %)
–7.3
1.4
Cash and cash equivalents
47.1
53.4
–6.3
–11.8%
Financial liabilities
265.6
301.2
–35.6
–11.8%
Net debt
218.5
247.8
–29.3
–11.8%
2.8
3.7
98.6
113.2
Net debt/adjusted EBITDA (in years)
Gearing (in %)
L e b Ko l 1
L e b Ko l 2
01
F a s h i o n f o r wa r d
F o u r s tr o n g bra n d s o fferi n g o n -tre n d fa s h i o n
f o r a l l age gr o u p s , t h r o u g h o u r 1 , 3 5 0 s ta n d - a l o n e
s t o re s i n ce n tra l l o cati o n s a s w e l l a s
a n o n l i n e s t o re f o r eac h bra n d . O n t o p o f t h at:
a c o n s p ic u o u s m edia p re s e n ce , ra n gi n g
fr o m T V s p o t s t h r o u g h t o a l ife s t y l e b l o g .
O u r c u s t o m er s l i k e u s – a s i s b o r n e o u t
n o t l ea s t b y o u r re p eated d o u b l e - digit reve n u e
gr o w t h i n 2 0 1 3 . O u r i n ter n ati o n a l tea m
c l o t h e s p e o p l e t o day a n d a n tici p ate s t h eir w i s h e s
f o r t o m o rr o w. We are i n de m a n d , a n d w e are
gr o w i n g d y n a m ica l ly. T h i s p u t s u s o n c o u r s e f o r
f u t u re s u cce s s . I n o t h er w o rd s : w e are
fa s h i o n f o r ward .
We de m o n s trate j u s t h o w w e d o t h i s
i n o u r m aga z i n e , p u b l i s h ed t o get h er w it h o u r
2 0 1 3 A n n u a l R e p o rt.
03
01
FA S H I O N F O R WA R D
FASHION
FORWARD
JOURNAL 2013
F O U R S T R O N G B R A N D S O F F E R I N G O N -T R E N D F A S H I O N
FOR ALL AGE GROUPS, THROUGH OUR
1 , 3 5 0 S TA N D A L O N E S T O R E S I N C E N T R A L L O C AT I O N S A S
WELL A S AN ONLINE S TORE FOR E ACH BR AND.
O N T O P O F T H AT: A C O N S P I C U O U S M E D I A P R E S E N C E ,
R ANGING FROM T V SPOTS THROUGH TO A
LIFEST YLE BLOG. OUR CUSTOMERS LIKE US – AS IS BORNE
O U T N O T L E A S T B Y O U R R E P E AT E D D O U B L E - D I G I T
R E V E N U E G R O W T H I N 2 0 1 3 . O U R I N T E R N AT I O N A L T E A M
C L O T H E S P E O P L E T O D AY A N D A N T I C I P AT E S T H E I R
W I S H E S F O R T O M O R R O W. W E A R E I N D E M A N D , A N D W E
A R E G R O W I N G D Y N A M I C A L LY. T H I S P U T S U S O N
COUR SE FOR FUTURE SUCCESS. IN OTHER WORDS:
W E A R E F A S H I O N - F O R WA R D .
W E D E M O N S T R AT E J U S T H O W W E D O T H I S I N O U R
MAGA ZINE , PUBLISHED TOGE THER WITH OUR 2013
A N N U A L R E P O R T.
4 YO U:
O U R 4 B R A N DS HIT
THE S P OT.
A N I N T E R N AT I O N A L T E A M :
O U R S TA F F T H I N K G L O B A L LY.
02
Our 4 brands target all relevant
age groups.
Employees from 56 countries
understand our customers and manage
up-to-the-minute trends.
A MAJOR
HIGH STREET PRESENCE:
OUR SHOPS
ARE EVERY WHERE.
With over 1,350 standalone shops, we are
now an integral part of the city centre scene.
p. 4
p. 28
04
05
p. 18
S H O R T A N D S W E E T:
O U R PRO DU C TI O N TIM E S PUT
U S A HE A D.
OUR FIGURES
AT
A GL ANCE
Sophisticated logistics processes make
sure that hot
fashion trends hit the shops faster.
O N THE SCRE E N:
W E A RE G E T TIN G O U R M E SSAG E
ACROSS .
In print and online, we are reaching our
target groups.
Our success and our strength are
measurable. The TOM TAILOR GROUP is a key
player in the European fashion industry.
1,364
2013
ANNUAL REPORT
R E TA I L S T O R E S A N D
E-SHOPS WORLDWIDE
... 1,010 BONITA and 354 TOM TAILOR stores. By acquiring BONITA
in 2012, we reached critical mass in terms of shops.
73.5 %
26.5 %
There is hardly a single town in Germany now without a BONITA
or TOM TAILOR store.
T O M TA I L
500
FASHION
FORWARD
O U R F I G U R E S AT A
PLOYEES
ANNUAL REPORT 2013
ermany is where we were founded and where our
but now we are at home all over the world.
proportion of revenue we generate abroad has
ernational stores are getting bigger and bigger.
mportant is the diversity of our employees, who
fering combines trends from around the world.
16,50 €
p. 34
O U R S H A R E P R I C E A S AT
31/12/2013
TOM TAILOR’s share price has increased by 26.9% since the
W W W.T O M -TA I L O R - G R O U P. C O M
IPO in 2010. A clear strategy, excellent business
development and transparent reporting procedures have all
t ib t d t thi
p. 26
www . tom - tailor - group . com
p. 42
T O M TAILOR GROU P
Br and World
The TOM TAILOR brand offers high-quality, fashionable
clothing that can be mixed and matched over and
casual wear and accessories in the mid-range price
over to create new outfits. They feature charming
segment for children and for women and men up to
details, a perfect fit and outstanding colour fidelity.
the age of 40. TOM TAILOR comprises the TOM TAILOR
The products are sold exclusively in BONITA’s own
and TOM TAILOR Denim brands with 12 collections a
retail stores as part of a highly standardised system
year, and TOM TAILOR POLO TEAM with ten annual col-
under the slogan “BONITA gibt es nur bei BONITA”
lections. The brand’s fashion world is complemented
(“You can only get BONITA at BONITA”). Demographic
by a large number of licensed products.
trends with an increasing number of people over 40,
combined with less intensive competition in this
BONITA offers fashion for women and men over 40.
market segment, offer BONITA substantial growth
The basis for its collections are high-quality items of
opportunities.
re v e n u e
BONITA creates fashion for women who want
to highlight their individual style. BONITA looks are
EUR
350.7
MIllion
authentic and confident, and enhance women’s
natural beauty. High colour fidelity and perfectly
coordinating looks provide plenty of options for
creating different outfits. BONITA fashion stands for
sophisticated, timeless style without sacrificing
AUGUS T
to
DEc E M B ER
EUR
fashionable details. BONITA men’s multifaceted outfits complement men’s personalities. Offering an
excellent fit, a large selection of different styles and
153.9
high-quality materials, BONITA men provides casual
MIllion
fashion that can be mixed and matched, from sporty
to relaxed.
2012
2013
re v e n u e
EUR
EUR
358.4
4 0 7. 7
million
million
The Company’s TOM TAILOR MEN and TOM TAILOR WOMEN
lines offer fashionable clothing for the 25- to 40-year-old
target group. The TOM TAILOR MEN collections combine
sporty and casual lifestyle elements. TOM TAILOR WOMEN
is targeted at young, modern women. The TOM TAILOR
KIDS brand consists of several product lines for children
aged 18 months up to 14 years and is complemented by
TOM TAILOR BABY.
2012
2013
re v e n u e
EUR
12.3
million
EUR
14.3
million
The premium sportswear brand is targeted at men and
women aged 25 to 40. Its ten collections a year feature
elaborate embroidered appliqués, classic emblems and
coordinating prints for a sporty style.
2012
2013
re v e n u e
TOM TAILOR Denim comprises the TOM TAILOR Denim Male
and TOM TAILOR Denim Female lines. These collections
EUR
1 0 5 .1
million
EUR
134.5
million
are aimed at young adults between the ages of 15 and 25.
They pick up on current trends from fashion capitals
around the world, marrying the latest styles and colours
with fashionable washes and selected details. TOM TAILOR
Denim embodies a spirited, authentic lifestyle.
2012
2013
Contents
03
Letter to Shareholders
129Confirm ation s
06
The Management Board
131 08
Highlights in 2013
Management Board
10
TOM TAILOR on the Capital Market
132
Auditors’ Report
13G roup M a n ag e me nt Re p or t
133
corp or ate G ov e rn a nce
15
Basic Principles of the Group
135
Corporate Governance Report
20
Report on Economic Position
Corporate Governance Statement
Responsibility Statement by the
35Employees
in Accordance with § 289 a
38
Sustainability and Responsibility
of the Handelsgesetzbuch
41 Corporate Governance Statement
(HGB – German Commercial Code)
42
Remuneration of Management Board and
Report of the Supervisory Board
Supervisory Board Members
144
Disclosures Required by Takeover Law
147 A ddition a l Inform ation
in Accordance with Section 315 (4) of the HGB
149
Financial Calendar
(German Commercial Code)
149
Contact Details
and Explanatory Report
150
Future-Oriented Statements
47
Risks and Opportunities
150
Publication Details
60
Report on Post-Balance-Sheet Date Events
44
61 Report on Expected Developments
65Con solidate d Fin a nci a l
State me nt s
67
Consolidated Income Statement
68
Consolidated Statement of Comprehensive
Income
69
Consolidated Statement of Cash Flows
70
Consolidated Balance Sheet
72
Consolidated Statement of Changes in Equity
74
Notes to the Consolidated Financial Statements
Hamburg, 12 March 2014
Dear Shareholders and Friends of the TOM TAILOR GROUP,
2013 was a busy year. We made considerable progress in what was sometimes difficult
terrain. We systematically expanded our market position, drove forward the integration
of our two brands – TOM TAILOR and BONITA – and laid the foundations for further
growth. We lifted revenue by 44% to approximately EUR 907 million, clearly reaching our
Group revenue target of between EUR 890 million and EUR 910 million. In addition
to these successes, we also had obstacles to overcome in 2013. The long winter at the start
of the year and the unusually cold spring made it one of the most difficult years on record
for the entire German textile industry and posed great challenges. Nevertheless, our
TOM TAILOR brands held up extremely well, increasing revenue by 17% to EUR 556.5 million and recurring EBITDA by 27.8% to EUR 55.8 million. By contrast, BONITA remained
well below our expectations with revenue of EUR 350.7 million and recurring EBITDA of
EUR 21.4 million.
We have reached important milestones with BONITA but are not yet where we want to be.
We cut BONITA’s production times by 16 weeks, re-engineered production and design
processes, opened the BONITA e-shop in June and started to modernise its branches. We saw
the first positive effects in the third quarter, when BONITA generated like-for-like growth
for the first time since its acquisition of 5.3%. However, we found that the measures we had
implemented were not intensive enough. As a result of high inventory levels from the old
design cycle, we decided to speed up our sales measures at the end of the fourth quarter so
as to start 2014 with a clean slate. This negatively impacted earnings, which meant that
we fell short of our target range of EUR 85 million to EUR95 million at Group level in 2013
despite lifting recurring consolidated EBITDA by 16.1% to EUR77.2 million.
Our strategic priorities for the current financial year are therefore absolutely clear: on the
one hand, we will continue driving forward the measures we have implemented at BONITA
to further grow the brand at a qualitative level. On the other, we are aiming to continuously
increase the profitability of our TOM TAILOR brand.
We will systematically model BONITA’s infrastructure and activities on the TOM TAILOR
brand, which has recorded unbroken growth for the past five years. The TOM TAILOR wholesale segment increased revenue by over 12 % to EUR 302.4 million, generating a recurring
EBITDA margin of 10 %. TOM TAILOR retail increased revenue by an impressive 23.5% to
EUR 254.1 million. Its EBITDA margin was stable at 10 % despite an environment characterised by significant promotional activities. On a like-for-like basis, the segment recorded
revenue growth of almost 6% in 2013. As a result, TOM TAILOR retail again outperformed
the German textile industry, which ended the year down 2 %.
Dieter Holzer
Chief Executive Officer/CEO
TOM TAILOR’s critical success factors are systematic trend management, analytical design
and intelligent merchandising. These enable our brand to rapidly identify trends, act flexibly
on the market and offer the right products in the right amount at the right place and at the
right time. We will implement this expertise at BONITA in a sustainable manner. In 2014,
we are therefore concentrating on three focus areas at BONITA: further improving product
and design expertise, analysing and adapting the pricing architecture and optimising
merchandising. Our resolve is also underpinned by a management change. Our previous
CPO Udo Greiser was appointed as the sole managing director of BONITA GmbH as of
1 February 2014. As well as knowing TOM TAILOR inside out, he has 20 years’ experience
in retail, products and licensing. This makes him the ideal person to leverage the potential
of the brand and pave the way for profitable growth together with BONITA’s product and
design team, which nearly reached full strength in November 2013.
We are convinced that the TOM TAILOR GROUP has a bright future ahead of it and that it
is ideally positioned to achieve sustainable, profitable growth with its two attractive brands, despite not making as much progress as we had expected in 2013. For the current financial
year, we are aiming for revenue in excess of EUR 950 million and a recurring EBITDA margin
of roughly 10 %. On behalf of the entire Management Board, I would like to thank all of
our employees at BONITA and TOM TAILOR for their hard work and dedication and you, our
valued shareholders, for your trust in and commitment to TOM TAILOR Holding AG.
Yours sincerely,
Dieter Holzer
Fa s h i o n F o r w a r d
06
Dr Axel Rebien
Dieter Holzer
C hief F inancial O fficer
C hief E x ecuti v e O fficer
CfO
CEO
b o r n i n 1 9 7 1 Dr Marc
Schumacher
b o r n i n 1 9 6 4 b o r n i n 1 9 7 7 C hief R etail O fficer
CRO
Udo greiser
Daniel Peterburs
C hief P roduct D e v elopment
C hief P roduct D e v elopment
and P rocurement O fficer
and P rocurement O fficer
b o r n i n 1 9 5 7 b o r n i n 1 9 8 0 CPO
CPO
( until 2 8 F E B R U A R y 2 0 1 4 )
( F rom march 2 0 1 4 )
07
Dr Axel Rebien
pleted an MBA at the Leipzig Graduate School of Management,
has been with the TOM TAILOR GROUP since October 2005. As
as well as earning his doctorate in economics (Dr. rer. oec.)
CFO, he is responsible for finance and accounting, controlling,
with a dissertation on consumer behaviour research. In 2008,
investor relations, IT, personnel, logistics and legal affairs.
he joined TOM TAILOR Holding AG as Director of Retail and
International Marketing.
After completing his vocational training as a bank clerk, Dr Rebien studied economics at Gottfried Wilhelm Leibniz Univer
sity in Hanover. In 1999, he began his career with the auditing
Udo Greiser
firm Arthur Andersen, initially as a project manager from 2000
In his function as CPO, Udo Greiser has been responsible for
to 2002 and, as of 2001, as a manager in the Transaction Advi-
product development, procurement and licensing at all
sory Services division. While at Arthur Andersen, he earned his
divisions of the TOM TAILOR GROUP from March 2012 until
doctorate (Dr. rer. pol.) from the Technical University of Chem-
February 2014. Mr Udo Greiser was appointed as the sole
nitz with a dissertation on enterprise valuation. After Arthur
managing director of BONITA GmbH effective 1 February 2014
Andersen merged with Ernst & Young, he worked as a manager
and stepped down from TOM TAILOR Holding AG’s manage-
in the Transaction Advisory Services division until 2005.
ment board accordingly.
He studied economics at the University of Konstanz. After
Dieter Holzer
several years in his own retail company, he worked for ESPRIT
has managed the TOM TAILOR GROUP since September 2006.
between 1997 and 2011, performing various functions for the
His responsibilities include the corporate strategy, distribution,
“edc by esprit” brand. As of 2003, he was responsible for edc
e-commerce and public relations business areas. He is also re-
woman and, as of 2007, he had overall responsibility for all edc
sponsible for integrating BONITA into the TOM TAILOR GROUP.
divisions. In November 2010, he joined the Global Executive
Management Board of ESPRIT as “Global Product Officer (CPO)
Between 1982 and 1985, he completed his vocational training
edc”. Most recently, he worked in an advisory capacity for the
as a retail specialist in the textile trade. After holding several
CBR Fashion Group.
positions in the fashion industry – including in the area of product development – he worked for ESPRIT from 1995 to 2000.
As a wholesale manager, he was responsible for the German, UK
Daniel Peterburs
and Eastern Europe markets. In 2000, he joined Tommy Hilfiger
has been responsible for product development, procurement
Deutschland as CEO. There, he oversaw the expansion of the
and licensing at all divisions of the TOM TAILOR GROUP in his
company’s wholesale, retail and franchise business in the core
function as CPO since 1 March 2014.
markets of Germany and Eastern Europe between 2000 and
2006. He was also responsible for the international roll-out of
Mr Peterburs completed his vocational training as an industrial
Tommy Hilfiger’s e-commerce business.
clerk and then studied Textile and Clothing Management at
Hochschule Niederrhein in Mönchengladbach. After completing his studies, he worked in various functions at Peek & Clop-
Dr Marc Schumacher
penburg in Düsseldorf from 2006 to 2008. Mr Peterburs joined
As Chief Retail Officer, Dr Schumacher has been responsible for
the TOM TAILOR GROUP in 2008 and was most recently
the retail business segment and marketing at the TOM TAILOR
the division head responsible for the TOM TAILOR Denim Male
GROUP since July 2011.
product line.
Between 1998 and 2001, Dr Schumacher completed an international training programme at HUGO BOSS AG while studying
business administration at Stuttgart University of Cooperative
Education at the same time. In 2001, he joined the Breuninger
Group where he began as an assistant to senior management,
subsequently serving as Director of Marketing and Communication between 2003 and 2008. While at Breuninger, he com-
Highlights in 2013
08
Highlights
in 2013
T O M TAILOR GROU P
B UILDS NEW
LOGIS T ICS CEN T RE WI T H DHL
A PRIL 2013
The TOM TAILOR GROUP has commissioned DHL Supply Chain,
one of the world’s leading logistics companies specialising in
contract logistics, to construct a new state-of-the-art logistics
centre in Hamburg. This represents a long-term expansion
of the Company’s partnership with DHL Supply Chain, which
began in 2008. The new warehouse will comply with the latest technical standards and its 40,000 m 2 of space will enable
it to cope with growth in the wholesale segment in particular.
The location offers the infrastructure required to efficiently
distribute goods around the world. DHL Supply Chain currently
handles 40 million items a year for the TOM TAILOR GROUP;
this figure is expected to rise to over 100 million by 2020. The
new logistics centre is scheduled to commence operations
in the first half of 2015 and to create up to 200 new jobs upon
completion.
T O M TAILOR GROU P
strengthens
l o n g -t e r m f i n a n c i n g
M AY 2013
B ONI TA n o w
a l s o ava i l a b l e o n l i n e
J UNE 2013
BONITA and BONITA men are now also available online.
The entire collections for both brands can be browsed at
TOM TAILOR Holding AG has issued a borrower’s note loan for
www.bonita.de (available in German only). Key priorities
the first time in order to refinance part of the liabilities from
were the attractive presentation of the items sold and a clear,
the acquisition of BONITA ahead of schedule. The borrower’s
user-friendly interface as well as a high technical standard
note loan has a total volume of EUR80 million and was primar-
for the e-shop. The Company is focusing on building up its cus-
ily placed with institutional investors in Germany and Europe.
tomer portfolio with the BONITA e-shop, and on reinforcing
The initial issue was significantly oversubscribed. The coupon
the BONITA brand’s image and brand awareness with its online
reflects current favourable interest rates and is within the
presence. The e-shop enables the Company to connect with
range of rates paid previously. As a result of the issue, the
the fastest-growing online customer group, mature consum-
TOM TAILOR GROUP’s financing now has a longer-term focus
ers. Members of this target group have high purchasing power
and the Group is in a solid position to continue its accelerated
and are particularly keen consumers. As a result, the BONITA
growth path.
e-shop offers great potential for additional growth in the area
of e-commerce. At present, the BONITA e-shop is only available
in Germany. Other countries will follow once they have been
rolled out.
Highlights in 2013
09
T O M TAILOR e - s h o p
l aunches
online Fa s hi on M ag a z ine
J UNE 2013
A link to TOM TAILOR’s new Fashion Magazine has been added
to the e-shop home page and the magazine can also be found
at www.tom-tailor.de/fashion_magazine (not available in
English). The magazine offers an intelligent combination of promotional material and an editorial platform. Customers can
effortlessly navigate through exciting content; style tips and
trend previews are interspersed with behind-the-scenes
photos and interviews with employees. One or two new entries
R e v i ta l i s at i o n
o f t h e B ONI TA b r a n d
SE P TE MBER 2013
a week ensure the magazine remains up to date. What is
The TOM TAILOR GROUP is aiming to increase its leverage of
more, it is extremely user-friendly: e-shop customers can pur-
BONITA’s potential and, at the same time, to offer its cus
chase all of the fashion items displayed in just two clicks.
tomers a modern shopping experience. To achieve these goals,
By offering appealing and efficient entertainment, the Fashion
all 1,000 BONITA stores will be revitalised in the coming
Magazine allows TOM TAILOR to create a new brand experience,
months. The focus is on attractive and clear presentation of
strengthen brand loyalty and provide a unique and enjoyable
merchandise, both in the store and in the display windows,
shopping opportunity.
and on emotionalising the BONITA brand. Going forward, the
use of decorative elements will provide a vibrant backdrop
for the BONITA brand world. A central element of this are the
BONITA campaign motifs. The “closing-down sale” for the first
250 stores began on 7 August under the slogan “We’re making
your BONITA more beautiful”. The other stores will follow in
groups of 250. The first stores have displayed the new BONITA
look and feel since the middle of September.
T O M TAILOR GROU P
RAISES EUR 2 9 . 5 M ILLION
IN CA P I TAL INCREASE
OC TOB ER 2013
The Company placed new shares and generated gross issue
proceeds of approximately EUR 29.5 million using an accelerated book-building procedure. The shares were purchased
by institutional investors in Germany, Europe and the United
States. The order book was oversubscribed several times in
a matter of hours as a result of high demand. The shares were
placed at a price of EUR 16.25 per share. This corresponded to a
discount of only 3.8% on the Xetra closing price on 23 October
2013 (EUR 16.89). The issue proceeds from the capital increase
will primarily go towards increasing the equity ratio, with the
aim being for this to be between 30% and 35% in the future.
In addition, the funds will be used to reduce gearing and acquire
interests in subsidiaries.
T O M TAILOR o n t h e C a p i t a l M a r ke t
10
T O M TAILOR
o n t h e C a p i ta l M a r k e t
S h a re s a nd In v e s tor Re l ation s
The TOM TAILOR GROUP’s investor relations activities aim to
nities also boosted share prices in a number of countries.
attract capital market participants as important partners
The benchmark indices repeatedly hit new highs and share
in the Company’s continuing growth, and hence to maintain an
prices ended the year with an impressive rally. Germany’s
additional financing channel. Constant and timely communi
leading index closed at 9,552 points, up 25.5% year-on-year.
cation is a priority for the Management Board, as is the transDie TOM TAILOR Aktie im Geschäftsjahr 2013
parent and reliable presentation of the Company’s strategic
After a strong start to 2013, TOM TAILOR’s share price fluctu-
Kurs der TOM TAILOR Aktie in EUR; SDAX indexiert zum 1. Januar 2013
focus, news and developments. This is a key element in building
ated in a corridor between EUR 16 to EUR 18 for the remainder
and strengthening trust and in achieving a fair and realistic
of the year, recording a slightly upbeat trend against the be-
market® valuation for TOM TAILOR’s shares. Against this back-
ginning of the year. Measured in terms of Xetra closing prices,21
ground, TOM TAILOR GROUP aims to further increase awareness
the shares hit their high of EUR 18.39 on 16 May. Overall,
1 8of
, 3 9its
E Ushares
R
of the Company and to cement the perception
as
2013 was dominated by a difficult economic environment for19
a promising growth stock.
the sector and extremely unfavourable weather conditions,
TOM TAILOR Aktie
SDAX
20
18
17
which depressed TOM TAILOR’s share price. The shares reached
Strong Sto ck M a rke t Pe rform a nce
a low of EUR 14.78 on 16 August before recovering again
1in
6 ,1 2013
2 EUR
over the rest of the year to close at EUR 16.50 (previous year:15
The stock markets turned in what can be seen as an extremely
EUR 16.12).1 As
4 , 7a8 result,
E U R they exceeded their starting price at
positive performance in 2013. Capital market sentiment was
the end of 2012 by 2.4%, whereas their benchmark index, the13
16
16,50 EUR
14
rose by 29.3%
in this
The Company’s
market
Jan.
Feb.
Mär.
Apr.
MaiThe easing
Jun. of theJul. SDAX,
Aug.
Sep.
Okt.period. Nov.
Dez.
upbeat
and
the environment
encouraging.
European debt crisis and the economic upturn on the export
capitalisation amounted to EUR429.4 million at the end of the
market, and in North America in particular, contributed to this.
year and the average number of shares traded daily on all
In addition, the eurozone is gradually gaining momentum after
stock exchanges was a good 58,400, up 46% on the prior-year
the recession ended in the course of 2013. Low interest rates
figure (40,000 shares). The shares’ SDAX weighting was 1.71%
coupled with high liquidity and the lack of investment opportu-
(previous year: 2.28%).
Development of the TOM TAILOR Share in 2013
TOM TAILOR share price in EUR; SDAX indexed as of 1 January 2013
TOM TAILOR share
21
SDAX®
20
19
EUR 18.39
18
17
16
EUR 16.50
E U R 1 6 .1 2
15
14
EUR 14.78
13
Jan.
Feb.
Mar.
Apr.
May
Jun.
Jul.
Aug.
Sep.
Oct.
Nov.
Dec.
11
Key Data on TOM TAILOR Shares
Class of shares
No-par-value registered shares
ISIN
DE000A0STST2
WKN (German securities ID number)
A0STST
Ticker symbol
TTI
Index
SDAX® (Prime Standard)
Stock markets
Frankfurt and Hamburg
Most important trading venue
Xetra (electronic trading system)
Designated sponsor
Berenberg Bank AG
Commerzbank AG
Close Brothers Seydler Bank AG
TOM TAILOR’s Share Performance
2013
2012
Units
26,027,133
24,209,035
Share capital
EUR
26,027,133
24,209,035
High (Xetra closing price)
EUR
18.39
17.15
Low (Xetra closing price)
EUR
14.78
10.75
Price at financial year-end (Xetra closing price)
EUR
16.50
16.12
Shares in issue as at reporting date
Free float at financial year-end
%
72.07
69.98
EUR million
429.4
269.19
Average daily trading volume
Units (approx.)
58,400
40,000
Recurring earnings per share
EUR
–0.14
0.81
Reported earnings per share
EUR
–0.87
0.01
Market capitalisation at financial year-end
Succe ss fu l C a pita l M a r ke t
Tr a n sac tion s
In addition, TOM TAILOR Holding AG implemented a cash capital
TOM TAILOR Holding AG issued its first-ever borrower’s note
capital. The Company placed 1,818,098 new, no-par-value reg-
loan on 5 June 2013 in order to refinance part of its liabilities
istered shares at a price of EUR 16.25 per share using an accel-
from the acquisition of BONITA ahead of schedule. The loan
erated book-building procedure. The discount to the closing
had a total volume of EUR80 million and was primarily placed
price on 23 October (EUR 16.89) was only 3.8%. The order book
with institutional investors in Germany and Europe. It has
was rapidly oversubscribed several times as a result of high
three tranches with maturities of 2.6, 3.6 and 5 years, and bears
demand. The shares were purchased by institutional investors
both fixed and variable rates of interest, which reflect the
in Germany, Europe and the United States. The gross issue
favourable level of interest rates in 2013.
proceeds of EUR 29.5 million were used to strengthen the
increase on 24 October that partially utilised its authorised
equity ratio, lower gearing, and acquire interests in subsidiaries.
Regionale
Aktionärsstruktur
12
31. Dezember 2013
Rest der Welt
5%
Luxemburg
9%
Hig h- Qua lit y S h a re
holde r Struc tu re
C a pita l M a r ke t Pre s e nce
In 2013, TOM TAILOR Holding AG’s shareholder structure
TOM TAILOR Holding AG continued, and expanded, its pro
1 0a
%result of the capital increase on
changed slightly, mainly as
active investor relations activities in the past financial year.
24 October 2013. ISLA Vermögensverwaltungs-GmbH re-
The Management Board and the Investor Relations team
mained the largest single shareholder with a share of 23.16%
updated investors and analysts regularly on the progress
Vereinigtes
Königreich2013. Additionally, Morgan Finance S.A.
as
at 31 December
21%
made in integrating BONITA, the economic environment
had a 4.77% interest in the Company. Consequently, the free
and current business developments, and the Company’s stra-
5 5 %a series of
float at the year-end was 72.07% and includes
tegic focus. In addition to the standard conference calls and
top-flight investors from Germany, the United Kingdom and
the analysts’ conference, TOM TAILOR took part in a number
the USA. As a result, investors from these countries consti-
of investors’ conferences and held a large number of road-
tute the majority of TOM TAILOR Holding AG’s shareholders.
shows, adding several important destinations such as cities in
Furthermore, 7.6% of TOM TAILOR shares were held privately.
Canada and Switzerland to the standard European and North
The total number of shares in issue after the capital increase
American financial centres.
USA
Deutschland
was 26,027,133.
TOM TAILOR Holding AG’s Annual General Meeting was held
on 3 June 2013 in Hamburg, with around 54.4% of the share
Regional Shareholder Structure
capital participating (previous year: 76.9 %). The proposed
as of 31 December 2013
resolutions on most agenda items were approved by a major
ity of over 96%. The exceptions were the items on the stock
Rest of the world
United States
option programme and on the authorised capital, which were
5%
Luxembourg
9%
approved by 77.1% and 87.1%, respectively. Shareholders
can find information on these topics and on all other aspects
10%
of TOM TAILOR GROUP’s financial communications, infor
mation, or development at its recently redesigned website
http://ir.tom-tailor-group.com or by contacting the IR team
United Kingdom
Germany
directly.
21%
55%
The number of financial analysts following the TOM TAILOR
GROUP in the past year and publishing analyses and research
coverage including recommendations remained at the same
Sp otlig ht on Tota l S h a re holde r
Re tu rn
high level of 12. The investment recommendations were posi-
The dividend policy pursued by TOM TAILOR Holding AG’s
TOM TAILOR aims to further enhance its presence on the capi-
Management Board is focused on total shareholder return,
tal markets by visiting new financial centres and continuing
which takes into account both dividends and share price
to expand research coverage, among other things.
changes. It primarily aims for a sustained performance by the
Company and an associated increase in its value, which
should be manifested in a positive share price performance.
The Management Board’s goal is to distribute a dividend in
those cases in which the Company generates a distributable
profit.
tive overall – eight ‘buy’, three ‘hold’ and one ‘sell’. For 2014,
Group
management report
9 0 7. 2
629.7
300.2
2009
3 4 7. 7
2010
411.6
2011
2012
RE V ENUE G RO W T H i n EUR MI L L ION
2013
15
Ba sic Pr inciple s of the G rou p
15
Business operations and Group structure
18
Strategy and Performance Measurement
19
Internal Management System
44Di sclosu re s requ ire d by
ta keov e r l aw in Accorda nce
w ith s ec tion 315 (4) of the HG B
(G e rm a n Comme rci al Code)
a nd E xpl a n atory R e p or t
20Re p or t on economic p osition
20
Macroeconomic and Sector-specific Environment
47 R i s k s a nd Opp or tu nitie s
21 Significant Events in the Reporting Period
48
Risk Management
22
Net Assets, Financial Position and Results of
49
Accounting-Related Internal Risk Control System
Operations
35E mploy e e s
50Risks
57 Opportunity Management
59 Overall Assessment by the Management Board
38Sus ta in a bilit y a nd
Re s p on sibilit y
38
Continually Extending our Corporate
on the Group’s Risk and Opportunity Situation
60Re p or t on P os t-Ba l a nce-She e t
Date Ev e nt s
Commitment
in Many Different Ways
61 Re p or t on E xpec te d
De v e lopme nt s
Taking Responsibility Where it is Needed
in the Production Process
Focus on the Environment
38
39
39
Developing and Supporting Employees
41Corp or ate G ov e rn a nce
S tate me nt
42Re m u ne r ation of M a n ag e me nt
Boa rd a nd Su pe rv i sory Boa rd
Me mbe r s
42
Remuneration of the Management Board
Members
43
Remuneration of the Supervisory Board
Members
61 Strategic Outlook
61 Positive Global Economic Development Expected
62
Expected Business Developments
63
Expected Development of the Group’s Position
64
Overall Assessment of Expected Developments
by the Management Board
Group Management Repor t
15
Basic Principles
of the Group
B u s i n e s s o p e r at i o n s
and Group structure
Alongside TOM TAILOR Holding AG, a total of 41 (2012: 39)
direct and indirect subsidiaries are now included in conso
lidation.
TOM TAILOR G ROUP Pre s e nt
i n M o r e Th a n 35 Co u n t r i e s
Effective 1 May 2013, the Group acquired a 51% interest in
The TOM TAILOR GROUP is a vertically integrated fashion
further expansion. The purpose of this company, which is
and lifestyle company that offers casual wear in the mid-
operated with a partner, is to increase market penetra-
range price segment. The TOM TAILOR brand comprises the
tion in the Romanian market. In addition, in the third quarter
TOM TAILOR brand with collections from the TOM TAILOR MEN,
of 2013 BONITA GmbH & Co. KG was merged with BONITA
WOMEN, KIDS, MINIS and BABY product lines, the TOM TAILOR
Deutschland Holding GmbH, which was then renamed BONITA
Denim brand with the Denim Male and Denim Female product
GmbH, in order to streamline the legal structure of the
lines and the TOM TAILOR POLO TEAM brand. The BONITA
BONITA subgroup.
S.C. TOM TAILOR RETAIL RO S.R.L., Romania, as part of its
brand comprises the BONITA and BONITA men product lines,
which have their own profile and are aimed at the over-40
Due to the possibility of control, the majority interests are
target group. This product portfolio is complemented by a wide
largely included in full in the TOM TAILOR GROUP, and the
range of fashionable accessories.
non-controlling interests disclosed. The 49 % interest in the
company in Northern Ireland is included in the consolidated
The TOM TAILOR GROUP primarily sells its products in its
financial statements using the equity method. Most subsidi
core markets of Germany, Austria, Switzerland, the Benelux
aries in Germany and abroad are held via TOM TAILOR GmbH,
countries and France. The Company is also present in over
which is domiciled in Hamburg, Germany, and whose sole
35 other countries.
shareholder is TOM TAILOR Holding AG.
LEG A L STRUCTURE OF THE
TOM TAILOR G ROUP
The TOM TAILOR G ROUP ’ s Prov e n
Busine ss Mode l
The TOM TAILOR GROUP is managed by TOM TAILOR Holding
The TOM TAILOR GROUP does business using two brands,
AG, which is domiciled in Hamburg, Germany. In this role, the
TOM TAILOR (TOM TAILOR, TOM TAILOR Denim and TOM TAILOR
parent company is mainly responsible for the Group’s strategic
POLO TEAM) and BONITA (BONITA and BONITA men).
focus and performance, corporate finance, risk management
and decisions relating to collections. In addition, TOM TAILOR
The TOM TAILOR brands offer casual wear and accessories
Holding AG is responsible for internal and external commu
for children and for women and men up to the age of
nication, including contact with the capital market and with
40 predominantly in the mid-range price segment under
shareholders. The various subsidiaries perform the operating
the slogan “Casual fashion for a casual life”. TOM TAILOR
business.
releases 14 collections a year (12 monthly collections
and two basic collections every six months) for TOM TAILOR
The TOM TAILOR GROUP is headed by a management team
MEN, TOM TAILOR WOMEN and TOM TAILOR Denim,
with many years’ experience of the sector and the market,
and ten collections a year for TOM TAILOR POLO TEAM. The
led by four Management Board members. A lean, divisionally
offering also comprises a large number of licensed
based organizational structure with clearly defined top and
products. The fashion group sells its TOM TAILOR collections
bottom line responsibilities enables business processes to be
via its retail (Company-owned stores and e-commerce)
effectively managed and provides transparent cost and
and wholesale segments (primarily franchise stores and
earnings control.
shop-in-shops).
16
The TOM TAILOR GROUP sells fashionable clothing for men and
they are sold. On the other, the product lines and collections
women over 40 under the BONITA brand. BONITA’s collec-
are coordinated with each other so as to offer retail and
tions are based around items of clothing that can be mixed and
wholesale customers a comprehensive, broad-based over-
matched repeatedly to create new outfits. The products are
all range.
sold exclusively in BONITA’s own stores – and in Germany also
via its own e-shop since June 2013 – using a highly standard-
Product Lines/Collections
ised system under the slogan “BONITA gibt es nur bei BONITA”
TOM TAILOR Brands
(“You can only get BONITA at BONITA”). Unlike the TOM TAILOR
TOM TAILOR
brands, the BONITA brand’s collections are not currently sold
The TOM TAILOR GROUP markets the product lines TOM TAILOR
in the wholesale segment. The Company sees attractive growth
MEN, WOMEN, KIDS, MINIS and BABY product lines under the
opportunities in the demographic trend in the TOM TAILOR
TOM TAILOR brand.
GROUP’s core markets and the increasing number of people
over 40, plus the less pronounced competition in this market
segment compared with the TOM TAILOR target groups.
The TOM TAILOR GROUP’s TOM TAILOR MEN and TOM TAILOR
WOMEN lines offer clothing for the 25- to 40-year-old
core target group. The TOM TAILOR MEN product line is a com-
The TOM TAILOR GROUP’s business model consciously com-
prehensive collection of fashionable casual menswear in
bines the emotional added value of its lifestyle brands with the
the mid-range price segment. These collections have been the
strategic advantages of an integrated system provider.
TOM TAILOR GROUP’s core business for many years. The
collections for men include T-shirts, polo shirts, sweatshirts,
The TOM TAILOR GROUP sees itself primarily as a trend man-
jumpers, jackets, coats, blazers, knitwear, trousers and
ager that understands what its customers need. This means
jeans. The TOM TAILOR WOMEN collection has been part of the
that, as a basic principle, the TOM TAILOR GROUP does not set
product range since 1999. This product line, which has a
any new trends with its collections – something that would
special focus on rapidly implementing fashion trends, includes
generally be associated with greater sales risk. Rather, it iden-
T-shirts, blouses, lingerie, sweatshirts, knitwear, jumpers,
tifies new and promising trends, implements them rapidly
jackets, coats, blazers, dresses, skirts, trousers and jeans,
in its own collections and offers these to a broad consumer
among other items. Every collection consists of different items
group (the “mass market”) in the mid-range price segment.
that are available in various colours and in the main sizes for
Vertical integration improves the TOM TAILOR GROUP’s access
the target customer group.
to relevant market information. Daily sales analyses for
the controlled selling spaces (“bestseller management”)
The TOM TAILOR GROUP has also offered clothing for children
allow the TOM TAILOR GROUP to closely tailor its offering to
and youths since 1995. TOM TAILOR KIDS is aimed at 8- to
its customers’ wishes and needs, and thus actively manage
14-year-olds and TOM TAILOR MINIS at children aged 18 months
sales. This ensures that sufficient volumes of the products
to seven years with the TOM TAILOR MINI BOYS and TOM TAILOR
that customers want are on offer in the selling spaces at
MINI GIRLS product lines. These are complemented by
the right time, increasing space productivity and reducing
TOM TAILOR BABY (up to 18 months). The MINI collections were
write-downs of unsold goods. This business model has
launched in 2002. In 2010, the TOM TAILOR GROUP expanded
enabled the TOM TAILOR GROUP to achieve sustained growth
its product range within the KIDS and MINIS product lines to
in an extremely heterogeneous and competitive market
include the new “BABY” collection (age group up to 18 months,
environment.
broken down into newborn baby and baby items). The main
focus of the KIDS, BOYS, GIRLS and BABY product lines is on
Collection Development and Product System
robust, wearable collections. These lines also take into ac-
As a trend manager, the Company combines the emotional
count the latest fashion trends, the needs of this young target
added value of its brands with the strategic advantages of
group and their parents’ expectations as regards functiona-
a system provider. The Group takes a systematic approach
lity. The products offered in the KIDS, BOYS, GIRLS and BABY
to collections. On the one hand, they are broken down into
product lines include trousers, jackets, jumpers, skirts, sweat-
different components in order to optimise them and how
shirts, T-shirts and jeanswear, among other items.
17
TOM TAILOR Denim
growth opportunities due to the demographic trend (the
TOM TAILOR Denim comprises the TOM TAILOR Denim Male and
increasing number of people over 40), plus the less pro-
TOM TAILOR Denim Female lines. The TOM TAILOR GROUP has
nounced competition in this market segment compared with
offered the Denim product lines since 2007. These collections
the TOM TAILOR target groups. BONITA’s offering is rounded
are aimed at youths and young adults between the ages of 15
off by a wide range of accessories, such as scarves, shawls,
and 25. The focus is on adapting current fashion trends. Among
necklaces, belts, watches and bags. Colourful and stylish
other items, the product range includes sweatshirts, jackets,
accessories that complement the collection are particularly
T-shirts, polo shirts, shirts, jeans, trousers and knitwear. The
important at BONITA. Unlike TOM TAILOR, the entire acces-
styles and patterns, the fashionable prints and the symbols
sory development process at BONITA is managed internally,
used differentiate the range from the collections sold by the
meaning that no licensing is involved. Products are only sold
TOM TAILOR MEN and TOM TAILOR WOMEN product lines.
at BONITA stores.
TOM TAILOR POLO TEAM
Business Activities by Segment
TOM TAILOR’s third brand, TOM TAILOR POLO TEAM, was
The TOM TAILOR GROUP sells its collections via its retail
launched on the market in 2012. The premium sportswear
segments (sales to customers) and the wholesale segment
brand is targeted at men and women aged 25 to 40. Its ten
(sales to resellers).
collections a year feature sporty fashion with elaborate embroidered appliqués, classic emblems and coordinating prints.
The retail segment comprises the BONITA brand and the retail
business of the TOM TAILOR brand. BONITA’s collections are
TOM TAILOR Accessories/Licensed Products
sold exclusively in its own retail stores, of which there were
The TOM TAILOR brand world is rounded off by a wide range of
1,010 at financial year-end, as well as via its own e-shop
accessories. The TOM TAILOR GROUP generates revenue from
since June 2013. In the case of the TOM TAILOR brands,
selling accessories itself and from licence fees for accessories
products in this segment are also sold in its own retail and
sold under the TOM TAILOR brands. The accessories product
outlet stores, as well as online via its own e-shop and via
range includes, among other items, shoes, leather products,
e-commerce partnerships with a number of mail-order
belts, gloves, hats, scarves, bodywear, ties, bags, perfume,
companies. In 2013, the TOM TAILOR GROUP increased the
jewellery, umbrellas, watches and sunglasses, bed linen and
number of TOM TAILOR retail stores by 39 to 354. In addi-
toiletries. Some of the accessories (e.g. shawls and scarves, in
tion, TOM TAILOR’s online business is available in 21 European
particular in the Denim Male and Denim Female product lines,
countries.
and jewellery) are designed and marketed by the TOM TAILOR
GROUP itself. However, a large majority are produced and dis-
The TOM TAILOR GROUP’s wholesale segment comprises
tributed by various licensees that work together with the
department stores and clothing chains that sell TOM TAILOR’s
TOM TAILOR GROUP to develop the products. Licensing and
goods through shop-in-shops, as franchisors, or through
close cooperation with the various partners involved have
multi-label sales outlets. TOM TAILOR products are also avail-
become a core component of TOM TAILOR’s strategy and suc-
able from mail-order companies. In 2013, the TOM TAILOR
cess over the past few years.
GROUP established 238 more shop-in-shops, bringing the
total to 2,269. The number of franchise stores rose by 22
BONITA Brands
to 197 in the same period.
The TOM TAILOR GROUP offers clothing for women (BONITA)
and men (BONITA men) in the over-40 age group under the
The TOM TAILOR GROUP generated 65.4% of its sales in Ger-
BONITA brand. Its collections are based on high-quality items
many in the reporting period (2012: 66.6%). The Company
of clothing that can be mixed and matched repeatedly to
currently sells its products in more than 35 countries world-
create new outfits. BONITA’s products are sold exclusively
wide. In addition to Germany, its core markets include Austria,
in its own stores. The Company believes it has substantial
Switzerland, the Benelux countries and France.
18
S t r at e g y
and Performance
Measurement
this market segment, offers it substantial growth opportunities in the future.
Generating Organic Growth by Increasing the Number
of Controlled Selling Spaces and Expanding e-Commerce
The TOM TAILOR G ROUP ’ s Compe titi v e
S tre n gth s a nd S tr ategy
The TOM TAILOR GROUP’s growth strategy is focused on ex-
The TOM TAILOR GROUP’s strategy is to become one of the
to further expand its online business with the help of the
leading continental European fashion and lifestyle compa-
European online shop for the TOM TAILOR brands. The BONITA
nies. The focus is on fulfilling customer requirements by rapid-
brand’s online business is also to be strengthened following
ly managing fashion trends in an analytical manner. The
the launch of its German e-shop. Thanks to its merchandise
TOM TAILOR GROUP’s market presence is determined by the
management system, the TOM TAILOR GROUP can efficiently
two largely complementary brands, TOM TAILOR and BONITA.
and quickly determine how well the collections are received by
TOM TAILOR covers the 0- to 40-year-old target group and
customers on its controlled selling spaces and which items
BONITA the over-40 target group. The Group’s strategy is to
are particularly popular. This allows it to closely tailor its prod-
outperform the industry as a whole in terms of revenue and
uct offering to its customers’ requirements and wishes. Under
earnings growth.
the existing merchandise management system, products are
The TOM TAILOR GROUP aims to achieve its strategy and the
to be managed. The objective is to generate the maximum
associated revenue and earnings growth primarily by imple-
possible revenue per square metre of selling space. The sales
menting the following competitive strengths and elements of
data also flow directly into the planning and development
its corporate strategy:
process for new collections. In addition, the Company believes
panding the number of its controlled selling spaces. It also aims
supplied to stores just in time and as needed, allowing sales
that sales risks are minimised by the monthly collection
Generating Growth by Reproducing the Existing
changes and the pre-ordering system in the wholesale seg-
Successful Business Model
ment.
TOM TAILOR GROUP plans to expand and reproduce its existing
business model – the sale of fashionable casual wear in the
Increasing Profitability through Economies of Scale
mid-range price segment – on its domestic market, Germany,
Over the past few years, the TOM TAILOR GROUP has organised
and its core international markets. The Group does business
the Company’s human resources and technical equipment,
using two brands, TOM TAILOR and BONITA. The TOM TAILOR
as well as its logistics, procurement and distribution functions,
brands offer high-quality, fashionable casual wear and
in such a way that the Company believes that further growth
accessories for children and for men and women up to the age
can be achieved without a corresponding increase in personnel
of 40 at attractive prices in the mid-range price segment.
and administration expenses and organisational development
TOM TAILOR releases 14 collections a year for TOM TAILOR MEN,
costs. The acquisition of the BONITA Group in August 2012,
TOM TAILOR WOMEN and TOM TAILOR Denim, and ten
which contributed an extremely large number of new stores
collections a year for TOM TAILOR POLO TEAM. These are
to the TOM TAILOR GROUP, means that a number of econo-
complemented by a large number of licensed products.
mies of scale could be directly leveraged. The two brands’ joint
The TOM TAILOR subgroup sells its collections via the whole-
use of the purchasing company that was set up in Hong Kong
sale and retail segments. BONITA offers fashion for women
in 2011 offers particularly large potential savings. BONITA now
and men over 40. Its collections are based on high-quality,
also sources approximately two-thirds of its products from
well-fitting items of clothing that can be mixed and matched
Asia. The share of products procured in Europe is to be reduced
repeatedly to create new outfits. The BONITA subgroup’s
further in future. In February 2014, BONITA started placing
products are sold exclusively in its own retail stores and via an
orders via the purchasing company in Asia that was previously
e-shop using a highly standardised system. The Company be-
used exclusively for the TOM TAILOR brands. Overall, the
lieves that the demographic trend and the increasing number
Company believes that these effects will further increase the
of people over 40, plus the less pronounced competition in
TOM TAILOR GROUP’s relative earnings power.
19
Controlling the Entire Value Chain, from Collection
financial and non-financial factors. In addition, leading indica-
Design Down to Marketing at the Point of Sale
tors that could affect the business are monitored and evalu-
The Company’s vertical alignment forms the basis for imple-
ated. The Management Board uses a large number of different
menting its corporate strategy. The TOM TAILOR GROUP
tools and indicators to evaluate business developments, en-
monitors and controls the entire value chain, from designing
hance its strategy, make investment decisions and sustainably
the collections through purchasing and product manufac-
increase the value of the TOM TAILOR GROUP.
ture, warehousing and logistics down to marketing at the
point of sale. The different links in the value chain are inter-
The reviews performed in the internal management system
connected and vertically integrated. The main focus is on
are based on non-financial and, in particular, on financial tar-
systematically analysing the daily sales figures, which are taken
gets. In addition to non-financial key performance indicators,
into account when developing new collections and in pro-
the TOM TAILOR GROUP uses the following financial key per-
curement planning. In addition, TOM TAILOR GROUP employ-
formance indicators to increase the Group’s value: revenue
ees in the retail and wholesale segments are able to pass
growth, EBITDA, recurring EBITDA, net debt and the equity
on customer feedback to the divisions at all times so that this
ratio. Relationships between these financial key performance
can be integrated into the development of new products.
indicators, such as the recurring EBITDA margin (recurring
This vertical systems integration allows the product divisions
EBITDA as a percentage of revenue) and the ratio of net debt
to manage trends quickly and effectively and to react to
to recurring EBITDA, are also used to manage the Group.
customers’ wishes.
To ensure comparability, the definitions of these key perform
ance indicators used for internal management are based
Internal
Management System
on the definitions generally used by publicly traded entities.
The differences between EBITDA and recurring EBITDA is
based on non-recurring items and special factors that impact
EBITDA or that are not incurred in the ordinary course of
business. These non-recurring items and special factors are
As a publicly traded entity, TOM TAILOR Holding AG has
excluded in order to present the actual development of
defined its financial objective as to sustainably increase the
the business. In 2012 and 2013, they related in particular to the
value of the TOM TAILOR GROUP. A standardised internal
costs reported in connection with the acquisition and inte
management system has been set up to provide value-based
gration of BONITA.
management for the Group as a whole and for the individual segments. The internal management system used by the
For further details, please see the section entitled “Financial
TOM TAILOR GROUP goes beyond a pure KPI (key performance
and Non-financial Key Performance Indicators” in the Report
indicator) system. It offers a comprehensive overview of
on Economic Position.
+3,0%
20
+0,5%
Report on
economic position
– 0, 4%
Deutschland
MACROECONOMIC
AND SECTOR - SPECIFIC
EN V IRONMENT
Euro-Zone
Welt
Entwicklung Verbraucherpreise 2013
GDP
Growth
in 2013
Veränderung
gegenüber
dem Vorjahr
Change compared to prior year
For the TOM TAILOR GROUP as an international enterprise,
there are a variety of key factors influencing its ability to
grow profitably and sustainably increase its enterprise value.
+3.0%
+6,2%
In addition to its strategic focus, these include economic
developments and the economic outlook, and sector-specific
trends.
IMPROV ED MACROECONOMIC
EN V IRONMENT
+1,5%
+0.5%
Deutschland
+1,5%
+1 , 4%
– 0. 4%
EuroZone
Industrie
länder
Eurozone
World
Germany
Entwicklungs
länder
Global economic growth weakened minimally in 2013 compared with the previous year, amounting to 3.0% according to
The inflation rate in Germany was 1.5% in 2013 (previous
IMF estimates from January 2014 (previous year: 3.1%). As be-
year: 2.0%). Consumers benefited in particular from cheaper
fore, this increase was primarily driven by the emerging econ-
oil prices, while food prices rose sharply.
omies, although their momentum also decreased slightly to
+4.7 % (previous year: +4.9%). The industrialised nations saw a
1.3% increase in GDP, on a par with the previous year (1.4%).
Consumer Prices Trends in 2013
Change compared to prior year
Overall, the global economy grew faster in the second half of
2013 than in the first half of the year. This was attributable
to the recovery in the eurozone countries on the one hand and
the increasing export demand in the emerging economies
on the other. Eurozone GDP declined by 0.4% for the year as
+6.2%
a whole (previous year: – 0.7%). The US economy picked up
again in the second half of the year, although it was unable to
fully compensate for the economic strength lost in the first
six months. In line with this, growth amounted to 1.9% (previ-
+1.5%
+1.5%
+1 . 4%
ous year: 2.8%).
Germany
Eurozone
Economic growth in Germany amounted to 0.5% in 2013
Industrialised
countries
Developing
countries
(previous year: 0.9 %). This increase is above average for eurozone countries, even though it is the weakest since the re
Consumer confidence in Germany improved noticeably year-
cession of 2009. The difficult economic environment impact-
on-year in 2013, at 7.4 points in December (previous year:
ed Europe while the slowdown in key sales markets such as
5.8 points). Economic and income expectations and consum-
China hit exporters in particular.
ers’ willingness to buy increased considerably compared
with the previous year. The positive labour market and income
trends and the moderate inflation rate made significant
contributions to this.
21
Economic growth in the majority of the TOM TAILOR GROUP’s
Overall, the Management Board of TOM TAILOR Holding AG is
other core markets was slower than in its domestic market
anticipating that economic conditions in its core markets in
of Germany. Economic output in the Netherlands declined by
particular will be very largely stable. In addition, the Company
1.3 % (previous year: –1.2 %), while it increased slightly in
expects significant potential savings in the coming years, par-
France, at 0.2% (previous year: 0.0%), and in Belgium at +0.1%
ticularly in procurement, as a result of the economies of scale
(previous year: – 0.3 %). Austria saw economic growth of
achievable thanks to the acquisition of BONITA.
0.4% (previous year: 0.9 %), roughly on a level with Germany.
Switzerland recorded positive economic growth (+1.7%,
previous year: 1.0 %). The picture in the Central and Eastern
European countries was mixed. Growth rates in Russia
and Poland were good. Slovakia and Hungary recorded weak
increases, while the Czech Republic remained in a slight
SI G NIFICANT E V ENTS
IN T H E REPORTIN G PERIOD
recession.
Sig nific a nt Ope r ating Ev e nt s
SECTOR-SPECIFIC DE V E LOPMENTS
The ambitious goal set for financial year 2013 of a recurring
Alongside macroeconomic factors, the main factors relevant
EBITDA margin of 12% could not be met. At EUR907 million,
for TOM TAILOR GROUP’s operating business are develop-
the revenue target of at least EUR900 million was exceeded
ments in the textile industry and on the procurement markets.
slightly; however, the recurring EBITDA margin was 8.6%,
The textile industry saw a further decline in sales in 2013,
significantly lower than planned. This negative deviation was
decreasing by 2 % as in the previous year. (Source: TW Testclub)
mainly attributable to the BONITA brand’s revenue and earn-
This development was due in particular to the unusual wea-
ings. The TOM TAILOR brand bucked the market trend despite
ther conditions: demand for the spring/summer collection
unfavourable weather conditions and a difficult market envi-
was muted due to the winter weather in March and the wet
ronment. In the case of BONITA, however, revenue was lower
and cold May. This was followed by a sudden and pronounced
than originally planned due to the persistent rain and winter
start to midsummer; however, although this lifted sales,
weather in the first half of 2013, and the fact that the poten-
the margins were much lower. Finally, warm late summer
tial of the BONITA brand was not yet fully exploited. Dedicated
temperatures also depressed demand for winter clothing.
marketing campaigns and seasonal sales measures were employed in connection with the changeover at the stores and the
The procurement markets relevant to the textile and clothing
delivery of the new collections in the second half of the
industry remained stable in 2013. The price of cotton in-
year, resulting in the previous collections largely being sold at
creased as against year-end 2012, rising from 75 US cents to
a discount. This had a negative effect on the gross margin.
approximately 85 US cents per pound – within the forecast
range of 82 to 90 US cents.
TOM TAILOR Holding AG issued its first-ever borrower’s note
(Source: cotton forward curve, NYB-ICE Futures US Softs)
loan in May 2013 in order to refinance part of the liabilities
from the acquisition of BONITA ahead of schedule. The borrow-
OV ERA LL ASSESSMENT OF THE ECONOMIC
ENVIRONMENT BY THE MANAGEMENT BOARD
er’s note loan had a total volume of EUR80 million and was
In 2013, the TOM TAILOR GROUP again clearly bucked the
Europe. It has three tranches with maturities of 2.6, 3.6 and
trend in the textile industry, generating growth of 44.1% that
5 years, and bears both fixed and variable rates of interest. It
was partly acquisition-related. All segments recorded revenue
matures no later than the end of May 2018, depending on
increases. In the retail segment (including e-commerce), the
the maturity of the individual tranches. The initial issue was
Company generated revenue growth of 68.1%, again partly for
significantly oversubscribed. The coupon reflects the favoura-
acquisition-related reasons. On a like-for-like basis and ex-
ble level of interest rates in 2013 and is within the range of
cluding BONITA, TOM TAILOR recorded a 5.9% increase in reve-
rates paid previously. As a result of the issue, the TOM TAILOR
nue. In doing so, the Group clearly bucked the trend in the
GROUP’s financing now has a longer-term focus and the Group
German retail trade.
is in a solid position to continue its growth path.
primarily placed with institutional investors in Germany and
22
TOM TAILOR Holding AG issued 1,818,098 new, no-par-value
registered shares on 24 October 2013 as part of a cash capital
increase. The new shares were placed with institutional in
vestors using an accelerated bookbuilding procedure at a price
NET ASSETS , FINANCIA L
POSITION AND RESU LTS OF
OPERATIONS
of EUR 16.25 per share. This generated gross issue proceeds of
approximately EUR29.5 million for the Company. The 1,818,098
Note on Net Assets, Financial Position and Results
new registered shares were issued by way of a capital increase
of Operations
from authorised capital. The implementation of the capital
As in 2012, the net assets, financial position and results of
increase was entered in the commercial register on 25 October
2013. As a result of the capital increase, the Company’s share
operations of the TOM TAILOR GROUP as at 31 December 2013
Umsatz
reflect the acquisition of the BONITA Group. The compara-
capital has risen from EUR 24,209,035.00 to EUR 26,027,133.00.
in Mio. EUR
bility
of the earnings figures reported below with the corre-
Shareholders’ pre-emptive rights were disapplied. The new
sponding prior-year data is therefore limited. In 2013, BONITA
shares bear dividend rights as from 1 January 2013.
was included for the full year, whereas in the previous year,
it was only included from 1 August 2012. As a result, BONITA’s
Org a ni sation
revenue and earnings are only contained in the prior-year
The following changes were made to the Management Board
figures for August to December. By contrast, its figures are in-
of TOM TAILOR Holding AG in the reporting period. During the
9 0 7, 2
cluded in full in the assets and liabilities as at 31 December
2012.
course of the year, Dr Marc Schumacher’s Management Board
contract was extended ahead of schedule until 30 June 2017.
629,7
RESU LTS OF OPERATIONS
411,6
3 4 7, 7
In addition, Mr Udo Greiser (CPO) was appointed as the sole
300,2
Revenue
managing director of BONITA GmbH effective 1 February 2014
Revenue Growth in Financial Year 2013
and is now devoting all his attention to the BONITA brand.
2
0 0 9TOM TAILOR
2 0 1 0GROUP’s revenue
2011
20 12
2013
The
rose by
a total of 44.1%
In line with this, his appointment as the Chief Product Develop-
in 2013 to EUR 907.2 million (2012: EUR629.7 million). Of this
ment and Procurement Officer (CPO) on TOM TAILOR Holding
increase, 30.4 percentage points (EUR 191.7 million) were
AG’s Management Board was terminated effective 28 February
attributable to the initial inclusion of BONITA, whose income
2014. Mr Daniel Peterburs has been appointed as the new CPO
and expenses were recognised in the first seven months
on the Management Board effective 1 March 2014.
of 2013, in contrast to the previous year.
Revenue
EUR million
9 0 7. 2
629.7
300.2
2009
3 4 7. 7
2010
411.6
2011
20 12
2013
BONITA generated total revenue of EUR 350.7 million (2012:
EUR 153.9 million), accounting for 38.7 % of Group revenue
(2012: 24.4%). TOM TAILOR, with its TOM TAILOR, TOM TAILOR
Denim and TOM TAILOR POLO TEAM brands, continued its
growth, again bucking the overall trend in the sector.
23
Umsatz nach Segmenten
Revenue rose by 17.0% to EUR 556.5 million in 2013 (2012:
in Mio. EUR
EUR475.8 million). In the fourth quarter of 2013, Group
Segment reporting in the TOM TAILOR GROUP is divided into
revenue increased by 8.7 % to EUR 251.2 million (Q4/2012:
the retail and wholesale segments. The retail segment com-
EUR 231.2 million). This revenue growth in the fourth
prises the retail and outlet stores operated by the Company
350,7
quarter is attributable exclusively to the TOM TAILOR brands,
and its e-commerce activities. E-commerce activities include
where Q4 revenue rose by 15.0 % to EUR 154.7 million
153,9
the TOM TAILOR e-shop and e-commerce partnerships
with
(Q4/2012: EUR 134.5 million). At EUR 96.5 million, BONITA’s
mail-order companies. In the wholesale segment,
tom tailor the Company
2 5 4 ,1
revenue in the fourth quarter of 2013 was at the prior year
level (2012: EUR96.7 million).
Segment Reporting
Retail
Wholesale
boNita
boNita
tom tailor
2 0 5 , customers,
8
1 5 4 , 6to business
distributes TOM TAILOR
products
106,7
76,5
who sell these to end customers via a number of different
tom tailor
2 7 0 , 0 shop-in302,4
2 5franchise
7, 0
sales
stores,
2These
4 1 , 0 include
2 2 3channels.
,7
Revenue by Regions
shops and multi-label sales outlets. Since 2012, reporting in
In Germany, the TOM TAILOR GROUP lifted its revenue by
the
2
0 0 9retail
40.9% in 2013 to EUR 590.7 million (2012: EUR419.2 million).
Umsatz nach Regionen
BONITA accounted for EUR 248.0 million of this increase
following its acquisition, so a distinction is now made between
in Mio. EUR
(2012: EUR 110.3 million). This corresponds to 42.0% of con
and TOM TAILOR POLO TEAM) and BONITA. There are a total of
solidated revenue in Germany.
three reportable segments (TOM TAILOR retail, TOM TAILOR
Ausland
boNita
102,7
Deutschland
segment
to
BONITA
2 0 1 0 has been
2 0 1extended
1
20include
12
20 1 3
the TOM TAILOR brands (TOM TAILOR, TOM TAILOR Denim
wholesale and BONITA).
tom tailor
Revenue growth was also strong outside Germany. At
213,8
EUR 316.5 million (2012: EUR 210.5 million),boNita
the TOM TAILOR
43,6
GROUP recorded a 50.4% increase in international
revenue.
boNita
tom tailor
2 4 8in, 0
1 6 6 , 9 activities
This was primarily driven by increased business
Revenue by Segment
EUR million
boNita
1 4 4Group’s
,6
South-Eastern1Europe
and the
expansion
in its
110,3
09,4
9 3 ,1
Retail
core international markets – Austria, Switzerland, the Benelux
tom tailor
Wholesale
tom tailor
342,7
2 6contributed
7, 0
countries
2 3 8 , 3 BONITA
3EUR
0 8 , 9102.7 million
2 0 7,1 and France.
boNita
350.7
(2012: EUR43.6 million) to international revenue.
20 0 9
20 1 0
2011
20 12
boNita
153.9
2013
tom tailor
The TOM TAILOR GROUP lifted revenue in its core international
markets by 47.1% to EUR 218.4 million (2012: EUR 148.5 million). This confirms its strategy of also investing strategically
in its core international markets outside its domestic market,
2 5 4 .1
tom tailor
76.5
223.7
106.7
241.0
154.6
205.8
2 5 7. 0
270.0
tom tailor
302.4
Germany.
2009
Revenue by Region
20 12
20 1 3
Total revenue in the two retail segments rose by 68.1% to
Foreign countries
boNita
102.7
Germany
tom tailor
213.8
boNita
43.6
tom tailor
166.9
2 0 7.1
2011
Retail Segments
EUR million
9 3 .1
2010
109.4
238.3
144.6
2 6 7. 0
boNita
248.0
boNita
308.9
Group revenue attributable to the retail segments increased
in line with this, to 66.7% (2012: 57.1%). This was mainly attributable to the full consolidation of BONITA for the first time, as
well as to growth in the TOM TAILOR retail segment. The retail
share of revenue should continue to increase going forward
due to the ongoing trend toward controlled selling spaces.
110.3
tom tailor
EUR604.8 million in 2013 (2012: EUR 359.7 million). The share of
tom tailor
342.7
TOM TAILOR Retail Segment The expansion of the
TOM TAILOR retail segment remains the key growth driver for
20 0 9
20 1 0
2011
20 12
2013
the TOM TAILOR GROUP. In line with this, revenue in this
segment increased by a disproportionately strong 23.5% in
2013, to EUR 254.1 million (2012: EUR 205.8 million). Conse-
24
Retail-Stores
Anzahl am 31. Dezember
quently, the share of TOM TAILOR brand revenue accounted
negative effect on the gross profit. In the fourth quarter
for by retail sales rose again, to 45.7 % (2012: 43.2%). On a
of 2013, revenue was on a level with the previous year boNita
at
boNita
like-for-like basis (i.e. excluding expansion), revenue growth
1.010
EUR96.5 million (Q4/2012: EUR96.7 million).9 8On
2 a like-for-
in the TOM TAILOR retail segment amounted to 5.9 % in
like basis, revenue declined slightly by 3.5% in this period
2013 (2012: 14.6%) in spite of challenging market conditions,
(Q4/2012: –4.0 %) as a result of subdued Christmas business.
again outperforming the sector as a whole. Like-for-like
For the year as a whole, BONITA revenue decreased by 4.6%
growth in the fourth quarter amounted to 2.9 % (Q4/2012:
on a like-for-like basis (2012: –4.0%).
15.4%), despite Christmas business falling short of expec
tations.
248
158
87
tom tailor
315
tom tailor
354
The
stores
as12against 31 Decem2
0 0 9number of
2 0BONITA
10
2 0 1 1rose by 2820
2013
ber 2012 to 1,010. Altogether, 47 new stores were opened and
The number of retail stores rose by a total of 39 as against
19 stores were closed. Of the 1,010 stores, 721 are in Ger-
31 December 2012 to 354. Altogether, 47 new stores were
many and 289 are in other countries. In 2013 (beginning June
opened and eight stores were closed. Of the 354 retail stores,
2013), revenue generated by BONITA’s e-commerce activities
144 are in Germany and 210 are in other countries. Revenue
amounted to EUR 1.2 million (2012: EUR0.0 million).
generated by e-commerce activities in 2013 rose by 12.2% yearon-year to EUR 39.6 million (2012: EUR 35.3 million).
Recurring EBITDA in the TOM TAILOR retail segment im-
Retail Stores
Number of stores as of 31 December
proved by EUR4.9 million (+24.0%) to EUR 25.5 million in 2013
(2012: EUR 20.6 million). The gross margin recorded a positive performance, rising to 59.7% (2012: 58.9 %) despite difficult conditions caused by the weather. The recurring EBITDA
margin was on a level with the previous year at 10.0 % (2012:
boNita
boNita
1,010
tom tailor
tom tailor
982
10.0%).
BONITA Retail Segment The BONITA brand comprises own
stores only. These are now joined by the BONITA e-shop, which
went online on 6 June 2013 and which will boost BONITA’s
87
158
248
315
354
growth going forward.
2009
BONITA generated revenue of EUR 350.7 million in 2013 (2012:
Recurring EBITDA in the BONITA segment declined by 6.1%
EUR 153.9 million, due to initial consolidation on 1 August
to EUR 21.4 million in 2013 (2012: EUR 22.8 million). Integration
2012). This accounted for 38.7% of Group revenue, or 58.0 %
expenses of EUR 9.4 million were incurred in 2013 (2012:
of total revenue in the retail segment. Revenue in the
EUR4.4 million), resulting in reported EBITDA of EUR 12.0 mil-
first half of 2013 was slightly below the market – which dete-
lion (2012, excluding transaction costs and negative goodwill:
riorated overall – due to the persistent rain and winter
EUR22.8 million). This year-on-year deterioration was mainly
weather, and the fact that the potential of the BONITA brand,
due to the difficult market environment caused by the weather,
which is highly regarded among end customers, was not
which led to lower revenue and higher discounts. In addition,
being fully exploited. The first products in the autumn/winter
the potential from the integration of BONITA was initially only
collection to be manufactured using TOM TAILOR’s prov-
partly exploited. The gross margin decreased by 4.5 percent-
en design and development process have been available in
age points year-on-year to 61.5%. It amounted to 60.0% in the
BONITA stores since the third quarter. Dedicated market-
fourth quarter (Q4/2012: 67.6%) and was hit disproportion
ing campaigns and seasonal sales measures were employed
ately hard by the high discounts offered due to the sale of old
in connection with the visual upgrade of the stores and the
collections. Now that the new goods are available, the Man-
delivery of the new collections, resulting in the previous col-
agement Board of TOM TAILOR Holding AG expects that the
lections being sold at what were in most cases high dis-
situation will stabilise from the first quarter of 2014 onwards
counts, especially in the fourth quarter of 2013. This had a
and that a positive trend will be recorded by BONITA.
2010
2011
20 12
2013
25
TOM TAILOR Wholesale Segment
Cost of Materials/Gross Profit/Gross Margin
Revenue in the TOM TAILOR wholesale segment rose by 12.0%
The cost of materials rose by 37.7% to EUR408.3 million in 2013
in 2013 to EUR 302.4 million (2012: EUR 270.0 million). The
(2012: EUR 296.5 million). Gross profit increased by approxi-
segment thus accounted for 54.3% of the TOM TAILOR brand’s
mately 50.0% from EUR 333.2 million to EUR499.0 million. This
revenue (2012: 56.8%). The Company increased its whole-
was mainly due to the initial full-year consolidation of BONITA
sale revenue in Germany by 6.4% to EUR 194.8 million (2012:
and the continuing growth of the TOM TAILOR brands. The
EUR 183.0 million) and its international revenue by 23.8% to
gross margin improved by 2.2 percentage points to 55.1% in
EUR 107.6 million (2012: EUR86.9 million). Overall, TOM TAILOR
the period under review (2012: 52.9%). This positive margin
benefited from the stabilisation of the Eastern European
development was attributable primarily to the retail seg-
sales markets. Revenue rose by 16.5% to EUR75.6 million in the
ment’s higher contribution to the Group’s total revenue. Over-
fourth quarter (2012: EUR 64.9 million). The Management
all, this revenue, which is characterised by a higher gross
Board expects this positive revenue trend to continue going
margin, rose from 57.1% to 66.7% in the year under review. The
forward. The number of shop-in-shops rose by 238 as against
ongoing expansion of the Group’s own procurement organi
31 December 2012 to 2,269. The number of franchise stores
sation in Asia also contributed to this positive development in
increased by 22 to 197.
the gross margin.
Order intake in the wholesale segment for the period up to
In the fourth quarter of 2013, the gross margin was down
the beginning of February 2014 was up 10.7 % as against the
slightly on the prior-year level, at 55.8% (Q4/2012: 56.7%). The
previous year.
primary reason for this decrease was the lower gross margin for the BONITA brand in the fourth quarter of 2013. This
Recurring EBITDA in the wholesale segment rose by EUR7.2 mil-
negative effect on the gross margin could not be completely
lion (+31.1%) to EUR 30.3 million in 2013 (2012: EUR 23.1 million).
offset by the TOM TAILOR brands’ positive performance.
Besides revenue growth, this increase was mainly due to
the optimisation of procurement processes and the improve-
Personnel Expenses
ment in the gross margin from 40.9% to 43.5%, which was
Personnel expenses rose by 59.2 % to EUR 193.5 million in
made possible by the purchasing company in Asia that has been
2013 (2012: EUR 121.5 million). This mainly reflects the 82.8%
operational since August 2012.
increase in the average number of staff at the TOM TAILOR
GROUP, which is primarily attributable to the acquisition of
Other Operating Income
BONITA and to ongoing expansion. The TOM TAILOR GROUP
Other operating income decreased from EUR 29.4 million
employed 6,499 people as at 31 December 2013 (previous year:
to EUR 27.4 million in financial year 2013. The key reason for
6,133), of whom 4,229 worked at BONITA. Unlike in the pre
this decrease is the negative goodwill of EUR 11.1 million
vious year, the personnel expense to revenue ratio declined at
included in the prior-year figure, which arose as part of the
a lower rate than the increase in the average number of em-
purchase price allocation of BONITA. Conversely, the BONITA
ployees. Acquisition-related one-off items and special factors
Group’s other operating income was included for the first
of approximately EUR6.4 million, which had a heavy impact
seven months of 2013 but is not contained in the prior-year
in the previous year, were reduced to EUR 1.8 million in 2013 in
period’s figures. In particular, insurance payouts for trans-
connection with the integration.
port damage to goods in transit increased year-on-year, from
EUR0.2 million to EUR 3.2 million. Licence income from the
licensing of the TOM TAILOR brand also made a notable con
tribution to this item, rising 32.4% from EUR 3.6 million to
EUR4.8 million in the year under review.
2009
2010
2011
20 12
2013
26
Other Operating Expenses
Other operating expenses were up 44.4% on the prior-year
period at EUR 268.8 million (2012: EUR 186.1 million). The
EUR82.7 million increase was mainly attributable to rental
Recurring EBITDA
Bereinigtes
EBITDA nach Segmenten
EUR million
in Mio. EUR
expenses of EUR41.7 million at BONITA in the first seven
Retail
months of 2013. These were only recognised as from August
boNita
Wholesale
in the previous year. In total, BONITA accounted for other
21,4
boNita
operating expenses of EUR 107.4 million (2012: EUR40.8 mil-
22,8
lion). Overall, the increase in other operating expenses was
proportional to revenue. Other operating expenses generally
do not increase as strongly as revenue due to fixed costs.
16,4
11,8
3 7. 8
14,0
4 0 .1
26,0
26,0
However, this lower rate of increase was not achieved in the
financial year as a result of integration costs of EUR 10.7 mil-
4 8 .1
31,7
66.5
7 7.
2
tom
tailor
25,5
tom tailor
20,6
2 3 ,1
30,3
lion incurred at the level of the Group in 2013 (2012:
2009
2010
2011
20 12
2013
EUR 19.2 million, including transaction costs) and marketing
2009
2010
2011
20 12
2013
expenses of EUR 29.3 million (2012: EUR 25.0 million).
Reported EBITDA rose 16.6% in 2013 to EUR 64.1 million
(2012: EUR 55.0 million) thanks to the positive performance
Other operating expenses mainly comprised rental expenses
of the TOM TAILOR brand, despite the one-off items and
(EUR 120.0 million; 2012: EUR68.4 million), logistics costs for
special factors of EUR 13.1 million (2012: EUR 11.5 million) and
order picking (EUR 20.5 million; 2012: EUR 17.6 million) and mar-
the decline in earnings at BONITA.
keting expenses (EUR 29.3 million; 2012: EUR 25.0 million).
The number of retail stores rose by 67 as against 31 December
2012 to 1,364 as at the 31 December 2013 reporting date.
Of these, 1,010 stores were attributable to BONITA and 354 to
Recurring EBITDA by Segment
EUR million
TOM TAILOR.
Retail
boNita
Wholesale
Earnings Before Interest, Taxes, Depreciation
21.4
boNita
and Amortisation (Ebitda)
22.8
Recurring EBITDA rose by 16.1% to EUR77.2 million in the year
under review (2012: EUR 66.5 million). The lower increase
in recurring EBITDA compared with revenue growth was due
tom tailor
16.4
11.8
14.0
26.0
26.0
in particular to BONITA’s earnings performance and higher
overall marketing expenses which were up EUR4.3 million on
25.5
tom tailor
20.6
31.7
2 3 .1
30.3
the prior year, at EUR 29.3 million (2012: EUR 25.0 million).
The recurring EBITDA margin for 2013 was therefore down
2009
2010
2011
20 12
2013
2.1 percentage points on the previous year, at 8.5% (2012:
10.6%).
Depreciation, Amortisation and Impairment Losses
Depreciation/amortisation amounted to EUR 57.7 million in
In the fourth quarter of 2013, recurring EBITDA decreased by
2013, up EUR 18.9 million year-on-year (2012: EUR 38.8 million).
13.0 % to EUR 30.0 million (Q4/2012: EUR 35.5 million). This
This figure contrasted with capital expenditure totalling
decline was mainly caused by BONITA’s earnings performance
EUR26.9 million in the reporting period (2012: EUR35.6 million).
(down EUR 8.2 million) and higher marketing expenses (up
Of this increase, EUR 15.7 million is attributable to the initial
EUR4.3 million) in the fourth quarter as against the prior-year
recognition of depreciation/amortisation for BONITA for the
period.
first seven months of 2013. Depreciation/amortisation also
reflects the investment policy over the last three years, under
which the TOM TAILOR GROUP focused in particular on further
expanding its retail business and the number of controlled
27
selling spaces (shop-in-shops and franchise stores). The
negative earnings before taxes. In addition, deferred tax
depreciation, amortisation and impairment losses item also
assets were not recognised for existing start-up losses at
includes write-downs of EUR9.0 million (2012: EUR6.4 mil-
international Group companies as a precautionary meas-
lion) of hidden reserves realised in the course of purchase
ure. With earnings before taxes of EUR –11.8 million (2012:
price allocation for TOM TAILOR Holding AG’s acquisition
EUR 0.4 million), the effective tax rate was thus 37.1%
of the TOM TAILOR operating business in 2005 and of BONITA
(2012, excluding negative goodwill: 24.3 %). The tax rate was
in August 2012.
relatively high for the negative earnings before taxes because of the limited tax deductibility in Germany of rental
Write-downs at BONITA totalled EUR 27.7 million (2012:
and financing expenses.
EUR 11.1 million), of which EUR4.3 million (2012: EUR 1.7 million)
related to hidden reserves realised during the acquisition.
Net Income for the Period, Earnings per Share
Recurring net income for 2013 was EUR 1.7 million, down
Financial Result
EUR 17.2 million on the previous year (2012: EUR 18.9 mil-
At EUR –18.3 million, the financial result in 2013 was lower
lion). The recurring earnings per share (EPS) amounted to
than in the previous year (EUR –15.8 million). This is primarily
EUR – 0.14 (2012: EUR 0.81). At EUR –16.2 million (2012:
attributable to higher interest expenses as a result of the
EUR 3.1 million), the net income reported for the period was
increase in debt following the acquisition of BONITA, as well
significantly lower than the prior year and led to earnings
as the increased utilisation of operating bank lines of credit
per share of EUR –0.87 (2012: EUR0.01). This decline in report-
due to seasonal factors. In 2013, the financial result includes
ed and recurring net income for the period is attributable
expenses of EUR 3.5 million (2012: EUR4.7 million) relating
exclusively to the integration costs incurred and to BONITA’s
to the refinancing measures implemented in 2012, which are
earnings performance. In the second half of 2013 in partic-
being amortised over the term of the financing.
ular, BONITA’s earnings were impacted to an above-average
extent by the high discounts offered as part of the dedi-
Income Taxes
cated marketing campaigns and seasonal sales measures
Income tax expense amounted to EUR4.4 million in 2013
adopted for the previous months’ collections. To this extent,
(2012: tax income of EUR 2.7 million). The tax expenses incurred
the reported and recurring net income for the period does
at the level of the international Group companies were the
not adequately reflect the actual positive performance by
main reason for this tax expense being incurred despite the
the TOM TAILOR brands.
28
Reconciliation to Recurring Net Income for the Period
2013
EUR thousand
Income taxes
2012
–16,241
3,107
4,397
–2,670
–11,844
437
18,301
15,783
of which in depreciation, amortisation and impairment losses:
– Amortisation from TOM TAILOR (PPA) from 2005
4,696
4,696
– Amortisation from BONITA (PPA) from 2012
4,276
1,697
of which in financial result:
– Financing costs/BONITA acquisition
3,538
4,713
of which in EBITDA:
– Financing costs/BONITA acquisition
–
14,787
– Negative goodwill from BONITA acquisition
–
–11,099
Net income before income tax
Financial result
One-off items/special factors
– Cost of BONITA integration
Total one-off items/special factors BONITA in EBITDA
– Cost of Bread & Butter for new TOM TAILOR POLO TEAM division
– Borrower’s note loans and refinancing costs
– Other one-off items/special factors
Aggregate one-off items/special factors, net of tax effect
Recurring EBIT
10,705
4,449
10,705
8,137
–
1,204
873
–
1,513
2,131
13,091
11,472
25,601
22,578
28,520
34,085
3.1%
5.4%
Depreciation, amortisation and impairment losses (net of amortisation from PPA)
48,702
32,398
Recurring EBITDA
77,222
66,483
as % of revenue
8.5%
10.6%
Depreciation, amortisation and impairment losses (net of amortisation from PPA)
–48,702
–32,398
Financial result (net of one-off items/special factors)
as % of revenue
–14,763
–11,070
Recurring net income before income tax
13,757
23,015
Income tax expense
–4,397
2,670
Imputed tax effect (30 %) on aggregate one-off items/special factors
–7,680
–6,773
–
–
1,680
18,912
Recurring net income for the period after deduction of minority interests (with minority interest)
–0.14
0.81
Net income for the period after deduction of minority interests (without minority interest)
–0.87
0.01
Deferred taxes interest cap (“Zinsschranke”)
Recurring net income for the period
Multi-Year Overview of Results of Operations
EUR thousand
Revenue
2007
2008
2009
2010
2011
2012
2013
261.3
283.5
300.2
347.7
411.6
629.7
907.2
Gross margin (in %)
42.5
41.4
45.9
46.0
49.0
52.9
55.0
EBITDA
27.0
10.9
37.0
30.1
46.4
55.0
64.1
Recurring EBITDA
35.0
22.1
37.8
40.1
48.1
66.5
77.2
–14.9
–21.7
–17.7
–11.3
–7.1
–15.8
–18.3
12.8
–25.3
–5.6
2.4
10.0
3.1
–16.2
Financial result
29
FINANCIA L POSITION
uation of the loan finance is dependent on compliance with
Liquidity and Financial Management Principles
certain financial covenants (EBITDA/net interest income, net
Financial management is performed centrally by the
debt/EBITDA and an equity ratio > 27.5%); these are to be cal
TOM TAILOR GROUP’s headquarters in Hamburg. The goal is
culated on the basis of the consolidated financial statements
to ensure consistent, Group-wide liquidity management,
prepared in accordance with International Financial Reporting
make optimum use of the available liquidity and guarantee
Standards (IFRSs). In addition to the borrower’s note loan, the
the TOM TAILOR GROUP’s ability to meet its financial obli
bank finance comprises a current account overdraft facility of
gations. On this basis, the TOM TAILOR GROUP’s financial
EUR137.5 million (utilisation as at 31 December 2013: EUR70.8 mil-
management aims to maintain sufficient liquidity for the
lion), a guaranteed line of credit in the amount of EUR137.5 mil-
Company’s future growth at all times. The cash generated
lion (utilisation as at 31 December 2013: EUR 59.4 million) and
by operating activities and the available bank lines of credit
existing term loans of EUR 90 million. The variable effective
are a key source of financing.
interest rate for the lines drawn down is based on threemonth and six-month EURIBOR plus a margin that ultimately
The TOM TAILOR GROUP’s financial management is geared
depends on the ratio of net debt to EBITDA. The bank lines
towards the requirements of operating activities in the short
of credit are available to the TOM TAILOR GROUP until 19 June
and medium term, while corporate strategy is the long-term
2015 plus a one-year extension option in each case. This
focus. Rolling cash flow planning and daily liquidity reports are
means that financing for the TOM TAILOR GROUP is secured.
used to determine liquidity requirements.
The financial covenants were met in 2013.
The TOM TAILOR GROUP enhances its financial flexibility and
reduces its reliance on banks through a range of financial
Cash Flow
instruments and measures. It also maintains good business
The cash generated from operations at Group level was
relationships with the consortium banks. Together, these
EUR 59.7 million in 2013, EUR39.3 million more than in the prior-
factors contribute to achieving a strong negotiating position
year period (2012: EUR 20.4 million). The decline in net in-
and optimum borrowing terms.
come for the period (down EUR 19.3 million) was largely offset
by the increase in non-cash depreciation/amortisation (up
The TOM TAILOR GROUP covers its financing needs by main-
EUR 18.9 million) compared with the previous year. As a result,
taining a balanced debt-to-equity ratio, which ensures both
the increased cash generated from operations is mainly
financial stability and sufficient flexibility. Going forward, the
attributable to two effects: to lower capital tied up in inven
aim is for the equity ratio to be in excess of 30 %. At 29.2 %
tories as against the previous year (EUR 13.7 million; 2012:
as at 31 December 2013, it was still slightly under this target
EUR 32.1 million) on the one hand, and to the lower amount of
figure as a result of the negative net income for financial
income taxes paid (EUR0.6 million; 2012: EUR14.1 million) on the
year 2013.
other hand. Compared with the previous year, year-end inventories were positively impacted in particular by the sell-off of
The TOM TAILOR GROUP monitors the financing opportunities
the previous months’ collections at BONITA. The overall rise
on the financial markets and trends in financing availability
in capital tied up in inventories will be offset by the higher cash
very closely in order to ensure it maintains adequate liquidity
inflows from sales in the future. With respect to the income
over the long term. In May 2013, a portion of the previous
taxes paid, the negative net income for the period and the lower
short-term financing entered into as part of the BONITA acqui-
tax prepayments associated with this had a positive effect.
sition amounting to EUR 80 million was replaced by the successful issuance of borrower’s note loans. The issue was placed
Besides the change due to the expansion of business activities,
mainly with institutional investors in Germany and other Eu-
the remaining liquidity effects compared with the previous
ropean countries. The borrower’s note loan has three tranches
year were not due to special factors. The negative effects on
with maturities of 2.6, 3.6 and 5 years, and bears both fixed
cash flow were very largely offset by the seasonal and ex
and variable rates of interest. It matures no later than the end
pansion-related increase in trade payables. The changes in the
of May 2018, depending on the maturity of the individual
previous year partly reflected the initial consolidation of the
tranches. As is the case with the existing bank finance, contin-
BONITA Group.
30
as well as seasonal drawdowns of existing bank lines of credit
Non-cash changes in the amount of EUR –3.2 million (2012:
EUR –21.4 million) mainly comprise changes in the fair value
in connection with the Group’s operating activities and
of currency forwards entered into to hedge purchasing
the scheduled repayment of long-term loans to banks in the
volumes denominated in US dollars. Negative goodwill of
amount of EUR 10 million. A total of EUR80 million in finan-
EUR 11.1 million made a significant contribution to this item
cial liabilities was raised in connection with the issuance of
in the previous year.
the borrower’s note loan, and the entire amount was used to
directly repay other financial liabilities.
The interest paid decreased by EUR 1.8 million year-on-year
to EUR 12.9 million (2012: EUR 14.7 million), despite higher
Liquidity decreased slightly by EUR6.2 million year-on-year
interest expenses. This was due in particular to the different
to EUR47.1 million. Net debt amounted to EUR 218.5 million as
interest rate period, and hence interest payment, for the
at 31 December 2013 (2012: EUR 247.8 million).
borrower’s note loan issued in 2013. Overall, this resulted in
net cash provided by operating activities rising by a further
Capital Expenditure
EUR 1.8 million year-on-year compared with cash generated
“Act Premium. Sell Volume” – this philosophy is particularly
from operations, to EUR46.8 million (2012: EUR 5.7 million).
relevant to product quality and store design. Customers should
feel comfortable in TOM TAILOR and BONITA selling spaces,
Net cash used in investing activities amounted to EUR 26.0 mil-
and this in turn should positively influence purchase decisions
lion (2012: EUR –148.8 million), significantly lower than the
because shoppers are spending more time in-store.
previous year. This was due to the acquisition of the BONITA
Group, which took place in the third quarter of the previous
EUR 26.9 million (2012: EUR 35.6 million) was invested Group-
year and which led to cash outflows of EUR 116.0 million.
wide to further expand controlled selling spaces in all
Excluding this non-recurring item, the investment volume in
three segments. EUR8.5 million of this was invested in the
2013 was lower than in the previous year. Investing activities
TOM TAILOR retail segment (2012: EUR 15.8 million) and
remained focused on expanding controlled selling spaces in all
EUR8.2 million in the TOM TAILOR wholesale segment (2012:
three segments.
EUR 14.3 million). Capital expenditure in the retail segment
largely related to shop fittings and fixtures for the new stores.
At EUR –27.0 million, net cash used in financing activities
EUR 5.5 million was spent on new selling spaces in the
was down sharply on the previous year (2012: EUR 187.0 mil-
wholesale segment. The remaining EUR 2.7 million primarily
lion), which was dominated by borrowing in the amount of
related to the IT/software infrastructure. BONITA invested
EUR 140 million to finance the BONITA acquisition. This decline
a total of EUR 10.2 million in 2013 (2012: EUR 5.5 million), pri-
was also due to the payments of EUR 29.5 million received
marily in shop fittings for new stores and in remodelling and
from the cash capital increase implemented in October 2013,
expanding existing stores.
Multi-Year Overview of Financial Position
2007
2008
2009
2010
2011
2012
2013
Equity
–52.0
–62.5
–68.2
100.2
113.7
218.9
221.7
Non-current liabilities
EUR million
208.6
218.5
231.1
99.9
111.1
300.6
331.6
Current liabilities
74.7
96.7
87.2
87.8
95.7
251.7
206.3
182.3
201.8
198.0
74.6
84.0
301.2
265.6
7.9
11.4
14.1
22.5
9.4
53.4
47.1
Cash funds
Net debt
Gearing (in %)
Cash flows from operations
Total assets
174.5
190.4
183.9
52.1
74.6
247.8
218.5
–335.6
–304.6
–269.6
52.0
65.6
113.2
98.6
22.2
16.8
37.4
15.0
20.5
20.4
59.7
231.3
252.7
250.0
287.9
320.5
771.2
759.6
31
NET ASSETS
Taking into account capital expenditure and deprecia-
Intangible Assets
tion, property, plant and equipment declined slightly
Alongside brands, the intangible assets item includes the cus-
by EUR 3.9 million to EUR 159.6 million in 2013 (2012:
tomer base, beneficial leases and licences that were realised
EUR 163.5 million).
by the identification of hidden reserves in the course of
purchase price allocation for the acquisition of the TOM TAILOR
Inventories and Trade Receivables
operating business by TOM TAILOR Holding AG in 2005.
Current assets mainly include inventories and trade receivables.
During the BONITA purchase price allocation in 2012, a total
The increase in inventories is primarily attributable to the
of EUR 187.7 million was added for the BONITA brand and
higher number of own stores (+67 stores) and to an order- and
a further EUR 20.4 million from the recognition of hidden re-
revenue-driven rise. Overall, inventories were EUR 14.1 million
serves was included in BONITA’s current leases. The brands
higher than in the previous year at EUR 137.8 million (2012:
and goodwill reported are tested for impairment on an annual
EUR 123.7 million). Trade receivables recorded a slight decrease
basis. With regard to the customer base, a distinction is made
of 7.7% to EUR47.9 million (2012: EUR 51.9 million). This decline
between regular customers, franchise partners, shop-in-shop
is largely due to a decrease in pending credit card payments for
customers and multi-label customers. The customer base
Vermögensstruktur
and licences identified at that time are amortised on a straight-
reporting date reasons to EUR3.9 million (2012: EUR5.9 million).
Kapitalstruktur
am 31. Dezember
line basis over their respective useful lives. The leases recog-
am 31. Dezember
nised are also amortised on a straight-line basis. In addition to
EUR771.2 million in 2012 to EUR759.6 million as at 31 Decem-
the
hidden reserves identified in 2005 and 2012, the intangible
Kurzfristige
The assets side of the balance sheet declined slightly from
ber 2013, mainly after adjustment for the reduction in fixed
32,0%
33,2%
Vermögenswerte
assets item largely comprises key money
paid for new selling
Kurzfristige
2 7, 2 %
32 ,6%
Schulden
assets due to depreciation, the increase in inventories and the
spaces, as well as software licences.
decrease in trade receivables.
Intangible assets decreased by EUR15.5 million to EUR337.3 mil-
Langfristige
Liabilities
Schulden
Langfristige
lion (2012: EUR352.8 million),
to amortisation.
6 8 , 0 % mainly6due
6,8%
Vermögenswerte
39,0%
43,6%
Under the non-current liabilities item, non-current financial liabilities rose by approximately EUR 34.6 million to
Property, Plant and Equipment
2 9EUR
, 2 % 204.6 million). The
Eigenkapital
28 , 4%
EUR 239.1 million (31 December
2012:
Property, plant and equipment mainly includes leasehold
increase is largely attributable to the successful issuance
improvements made20to
Company show12 fit out and
20remodel
13
of a borrower’s note20loan
12 with a total
2 0 1 3 volume of EUR80 mil-
rooms, as well as shop fittings and fixtures for the Company’s
lion. The entire amount was used to refinance previously
own stores. The logistics location operated by BONITA,
current financial liabilities incurred during the acquisition of
including the land, warehouse and operating facilities, is also
BONITA ahead of time. The borrower’s note loan has three
included in property, plant and equipment.
tranches with maturities of 2.6, 3.6 and 5 years, and bears
Asset Structure
Capital Structure
as of 31 December
as of 31 December
Current
assets
Non-current
assets
32.0%
68.0%
20 12
33.2%
Current
liabilities
32 .6%
Non-current
liabilities
39.0%
Equity
28 . 4%
2 7. 2 %
43.6%
66.8%
20 1 3
20 12
29.2%
2013
32
both fixed and variable rates of interest. Reduced drawdowns
EUR 16.25 per share under the terms of a private place-
of long-term bank lines of credit had an offsetting effect on
ment for institutional investors using an accelerated book-
non-current financial liabilities.
building procedure. This generated gross issue proceeds
of EUR 29.5 million for the Company. The new shares were
Under the current liabilities item, current financial liabilities
issued by way of a capital increase from authorised capital.
in particular declined to EUR 26.5 million (31 December 2012:
The implementation of the capital increase was entered in the
EUR96.6 million) due to repayments following the issuance
commercial register on 25 October 2013. As a result of the
of the long-term borrower’s note loan. Trade payables in-
capital increase, the Company’s subscribed capital rose from
creased year-on-year to EUR 111.8 million (31 December 2012:
EUR24,209 thousand to EUR26,027 thousand. The premium of
EUR 93.3 million), primarily as a result of the expansion of
EUR 27,726 thousand was appropriated to the capital reserves
business activities and reporting date factors.
after deduction of the capital raising costs.
Off-Balance-Sheet Financial Instruments
Consolidated net accumulated losses increased to
The Company does not use any off-balance-sheet financing
EUR 101.6 million due to the negative net income for the
instruments such as factoring, asset-backed securities,
period of EUR –16.2 million (2012: positive net income of
sale and leaseback transactions, or contingent liabilities in-
EUR3.1 million).
volving special-purpose entities not included in the con
solidated financial statements. The TOM TAILOR GROUP has
Overall, equity rose to EUR 221.7 million (31 December 2012:
a small number of other operating leases, for example for
EUR 219.0 million). As a result, the equity ratio also rose to
IT equipment and Company vehicles. Off-balance-sheet finan-
29.2 % (31 December 2012: 28.4%) due to the slightly lower
cial instruments therefore do not have any material effect
total assets.
on the Group’s net asset position.
Rating
Equity
The TOM TAILOR GROUP has sufficient bank lines of credit and
does not make use of financing instruments such as bonds
registered shares on 24 October 2013 as part of a cash
or commercial paper. Consequently, the TOM TAILOR GROUP is
capital increase. The new shares were issued at a price of
not rated by external rating agencies.
Multi-Year Overview of Net Assets
2007
2008
2009
2010
2011
2012
2013
157.4
167.9
166.5
181.9
195.1
524.6
507.3
73.9
84.8
83.6
106.0
125.4
246.6
252.2
Capital expenditure
7.9
23.7
11.5
25.4
22.6
35.6
26.9
Working capital
8.1
6.6
–7.4
6.6
27.0
82.3
73.9
231.3
252.7
250.0
287.9
320.5
771.2
759.6
EUR million
Non-current assets
Current assets
Total assets
33
OVERALL ASSESSMENT BY THE MANAGEMENT
BOARD OF THE NET ASSETS, FINANCIAL
POSITION AND RESU LTS OF OPERATIONS
exploited. The first products from the autumn/winter collec-
In the opinion of the Management Board of TOM TAILOR Hold-
since the third quarter. Large portions of the old collections
ing AG, financial year 2013 saw two different trends in the
were sold at low margins in the fourth quarter, in connection
TOM TAILOR GROUP. Despite a difficult financial year caused
with the visual upgrade of the stores and the delivery of
by the weather, the TOM TAILOR wholesale and TOM TAILOR
the new collections. This had a corresponding negative effect
retail segments performed extremely well compared with the
on the ability to meet the targets set. The gross margin in
previous year, and were able to meet the forecasts for the
the fourth quarter of 2013 saw an above-average decline to
financial year overall. The BONITA segment was dominated by
60 % (Q4/2012: 67.6%). For the year as a whole, BONITA’s
the integration process and by earnings that remained below
gross margin decreased by 4.5 percentage points year-on-year
expectations. This trend in the BONITA segment had a corres
to 61.5%.
tion to be manufactured using TOM TAILOR’s proven design
and development process have been available in BONITA stores
ponding negative effect on the Group’s ability to meet its
forecasts and on the TOM TAILOR GROUP’s overall net assets,
The TOM TAILOR brand, with its TOM TAILOR wholesale and
financial position and results of operations in 2013.
TOM TAILOR retail segments, generated recurring EBITDA within the target range in spite of difficult market conditions.
The consolidated fiscal year 2013 revenue forecast for the
However, this could not offset BONITA’s earnings performance,
TOM TAILOR GROUP as a whole of at least EUR900 million was
resulting in a recurring EBITDA margin of 8.5% at Group level.
met, at EUR907.2 million. This Group revenue of EUR907.2 million is also near the top of the more concrete consolidated
The aim of cutting net debt by between EUR 15 and EUR 20 revenue forecast of EUR890 to EUR910 million issued during
million was exceeded in 2013 with a EUR29.3 million reduction,
the year. The increase in controlled selling spaces made a par-
which was primarily caused by the cash capital increase
ticular contribution to this. Altogether, 94 new stores (planned:
implemented in October 2013 and the higher free cash flow.
100), 311 new shop-in-shop selling spaces (planned: 200)
Both of these effects more than compensated for the earn-
and 45 new franchise selling spaces (planned: 20) were opened.
ings and liquidity forecasts, which fell short of expectations.
The number of stores rose by 67 to 1,364 overall, and was
therefore slightly lower than the planned number of new
The Management Board of TOM TAILOR Holding AG views the
stores. The expansion of the TOM TAILOR wholesale segment
process of integrating BONITA – which could not be assessed
(shop-in-shops and franchise stores) progressed more quick-
precisely at the beginning of 2013 – as having been largely com-
ly than planned. The revenue trend at BONITA had a negative
pleted at the end of the year. Furthermore, the Management
effect, however. In 2013, BONITA suffered from the persistent
Board is confident that the year of integration in 2013 and the
rain and winter weather and subdued Christmas business in
measures implemented so far will mean that BONITA records
particular. To date, BONITA has only exploited part of its exist-
a significantly improved result in financial year 2014. This con-
ing revenue potential, resulting in a like-for-like decline of
fidence is based in particular on the experience gained from
4.6% for the full year (2012: decline of 4.0%).
the TOM TAILOR brands’ positive performance in recent years.
The target recurring EBITDA margin of 12% was not met, at
MANAG EMENT J UD G EMENTS
8.5%. In addition, the subdued Christmas business and
With the exception of the new methods described in the
BONITA’s earnings performance meant that the target recur-
notes no accounting policies were applied in the 2013 conso
ring EBITDA of EUR85 to EUR95 million defined during the
lidated financial statements that differ from those applied
year was not reached, at EUR77.2 million. This was due to the
in previous years and that, if applied differently, would have
trend in BONITA’s revenue and gross profit as a consequence
had a material effect on the net assets, financial position and
of a difficult market environment caused by the weather,
results of operations. Information on the influence of esti-
which led to lower revenue and higher discounts. In addition,
mates on the assumptions and judgements made is provided
the potential from the integration of BONITA was only partly
in the notes to the consolidated financial statements.
34
Financial Key Performance Indicators
EUR million
2007
2008
2009
2010
2011
2012
2013
261.3
283.5
300.2
347.7
411.6
629.7
907.2
EBITDA
27.0
10.9
37.0
30.1
46.4
55.0
64.1
Recurring EBITDA (in %)
35.0
22.1
37.8
40.1
48.1
66.5
77.2
Working capital
13.4
7.8
12.6
11.5
11.7
10.6
8.5
174.5
190.4
183.9
52.1
74.6
247.8
218.5
5.0
8.6
4.9
1.3
1.6
3.7
2.8
–22.5
–24.7
–27.3
34.8
35.5
28.4
29.2
Revenue
Net debt
Net debt/recurring EBITDA (in years)
Equity ratio (in %)
FINANCIA L AND NON -FINANCIA L KEY
PERFORMANCE INDICATORS
performed by the German magazine DER SPIEGEL or retailer
The performance measurement system used by the TOM TAILOR
in the wholesale segment, or trends in social networks
GROUP goes beyond a KPI (key performance indicator) sys-
such as Facebook) are used. The SPIEGEL brand survey, which
tem. It offers a comprehensive overview of financial and non-
is published every two years, is a crucial non-financial key per-
financial factors. In addition, leading indicators that could
formance indicator that measures TOM TAILOR’s development
affect the business are monitored and evaluated. The Manage-
from a consumer perspective with regard to brand awareness,
ment Board uses a large number of different tools and indica-
brand ownership and consumers’ purchasing appetite.
surveys) and internal studies (for example, customer surveys
tors to evaluate business developments, enhance its strategy
and make investment decisions.
Relevant Leading Indicators
The Management Board receives reports providing varying
Financial Key Performance Indicators
levels of detail about operational business developments on
A variety of reporting systems are used at the TOM TAILOR
an ongoing basis. Actual data is compared with the planning,
GROUP to measure financial key performance indicators. These
negative variances are analysed, and, where necessary, coun-
are differentiated at the level of both the overall Group and
termeasures are taken. TOM TAILOR’s Management Board
by segment. In addition to the permanent monitoring and re-
pays particular attention to analysing leading indicators. These
porting of revenue and earnings figures (primarily earnings
make it possible to draw conclusions about future busi-
before interest, taxes, depreciation and amortisation [EBITDA])
ness developments. Key leading indicators for the TOM TAILOR
down to the level of the individual stores, key indicators
GROUP are incoming orders, cotton price trends, the USD/EUR
such as net debt, the equity ratio, working capital and various
exchange rate, the gross margin generated per purchase
inventory turnover ratios are used in particular at Group
and like-for-like sales in Company-owned stores. Various key
level. In the wholesale segment, the figures for pre-orders/
performance indicators are also evaluated at store level,
orders received are also used for management purposes.
such as the conversion rate and the personnel expenses per
store. The conversion rate is the ratio of the number of
Non-Financial Key Performance Indicators
people who enter a store to those who actually buy something.
In addition to financial indicators, the TOM TAILOR GROUP
Special software helps model and optimise personnel plan-
uses a range of non-financial factors, e.g. in order to collect
ning and hence ultimately personnel expenses per store. In
and evaluate information about how the Company is per-
addition, regular comparisons are made with the performance
ceived. Both external surveys (for example, the brand survey
of relevant competitors.
Employees
35
E mployees
Employees by Region and Segment
2012
2013
Number of employees on 31 December
Retail
Wholesale
Total
Retail
Wholesale
Total
Germany
3,727
453
4,180
3,632
433
4,065
Core markets outside Germany
1,607
86
1,693
1,532
90
1,622
596
30
626
428
18
446
5,930
569
6,499
5,592
541
6,133
Other countries
Total
N U MB E R OF E MPLOY E E S U P
goals and salary developments are set, and the degree to
The TOM TAILOR GROUP had 6,499 employees on 31 December
which goals were met in the past year established, in annual
2013 (previous year: 6,133). Of this figure, 5,930 people (pre
appraisal interviews. These interviews also include employee
Mitarbeiter nach Geschlecht
appraisal criteria for their supervisors.
vious year: 5,592) were employed in the retail segments and
569 people (previous year: 541) in the wholesale segment.
31. Dezember 2013
As at the reporting date, 4,180 people (previous year: 4,065)
In addition to purely performance-related remuneration, the
were employed in Germany and 2,319 people (previous year:
Männer
TOM TAILOR GROUP also provides 7,
voluntary
social benefits.
4%
2,068) outside Germany. As at the reporting date, TOM TAILOR
For example, it offers a Company pension plan featuring add-
Holding AG has 27 employees (previous year: 24) including the
itional employer contributions and a Group policy for occu
four members of the Management Board.
pational disability insurance.
The TOM TAILOR GROUP’s top-level management team in
DI V E R SIT Y IN PR AC TICE
cludes 37 employees, 16 of whom are female. Women make up
For the TOM TAILOR GROUP, promoting diversity is a key focus.
Frauen
92 ,6%
43% of top-level management, a very high proportion.
The Company is convinced that only by drawing on different
cultural backgrounds, viewpoints, opinions and experience can
INTEG R ATION OF BONITA largely
complete d
companies exploit their full potential and achieve success.
The integration of BONITA’s structures, departments and
employees of 56 different nationalities. Women make up
processes into the TOM TAILOR GROUP was completed
around 83 % of TOM TAILOR employees and about 97% of
according to plan in financial year 2013. Experience shows that
BONITA employees. This means that 93% of Group employees
integrating different corporate cultures takes somewhat
are women.
The TOM TAILOR GROUP’s staff is very international, boasting
longer, but positive progress has been made and a common
set of values established. Overall, the integration process
has been successful.
Employees by Gender
PE RFORM A NCE-DR I V E N RE M U NE R ATION
Fair remuneration that encourages high performance and the
Men
7. 4 %
opportunity for employees to share in the Company’s success
are key features of the TOM TAILOR GROUP’s human resources
policy. Both of these components help reinforce employees’
commitment and motivation. Remuneration is based on fixed
and variable components, which vary depending on the func
tion performed and the employees’ position in the hierarchy.
The variable salary component depends on whether personal
goals and specified corporate goals – financial performance
indicators that vary by segment – have been met. Personal
Women
92 .6%
Employees
36
The TOM TAILOR GROUP takes the personal well-being and
FO CUS ON HE A LTH IN THE WORKPL ACE
E ND -TO -E ND SU PP OR T PRO G R A MME S
FOR NE W RECRU IT S
health of its employees extremely seriously. This is why the
Well-educated and motivated new talent is key to a company’s
Group has launched its Health in the Workplace initiative,
long-term success. The TOM TAILOR GROUP reaches potential
based on three key areas:
candidates by working together with universities, by presen
–External employee counselling
tations at fairs, through its “Employees Recruit Employees”
–Management seminars that promote health and realise
programme and other initiatives. The Company also works with
employee potential at work
–Lectures on stress prevention
the Akademie für Mode und Design (AMD – Acad-emy of Fashion
and Design) to inform young students about various profes
sions and to encourage them to join TOM TAILOR. In June 2013,
The counselling service, which was introduced in October
the Company organised an employment fair in Hamburg for
2012, is free of charge. Employees can contact an external
the Academy’s students. Additional similar projects are planned
institute in person, by phone, or anonymously if desired with
for 2014 in support of the Group’s commitment to promoting
questions or problems related to their job and their work
new talent.
place, private and family issues, and their health. The institute
treats all enquiries as strictly confidential and is bound to
Training young people is a particularly high priority for the
complete secrecy as against the TOM TAILOR GROUP. The Com
TOM TAILOR GROUP. The Company’s training concept includes
pany introduced this measure to support its employees in
traditional vocational training, dual work-study programmes,
overcoming challenging and stressful life situations and so
internships and trainee programmes for university graduates.
help maintain their health.
The TOM TAILOR GROUP aims to position itself as an attractive employer, in order to attract talented and well-educated
All managers in the TOM TAILOR GROUP have the opportunity
employees and ensure they remain with the Company for
to take part in a seminar on health- and potential-driven
the long term.
management. Two-thirds have already completed this training,
which aims to make sure that all managers are aware of the
With this in mind, TOM TAILOR and BONITA appeared together
issues affecting health in the workplace and that a common
for the first time under the umbrella of the TOM TAILOR GROUP
understanding is developed over the long term.
at the Young Professionals’ Day in April 2013. This event in
Frankfurt is organised by TextilWirtschaft, the fashion indus
In addition, an initial presentation about stress prevention was
try’s leading trade magazine, and is devoted to entry-level
held in June 2013 at the TOM TAILOR GROUP’s headquarters
and development opportunities in the industry. The Company
in Hamburg. The aim was to sensitise employees to the issue
also regularly takes part in “Girls’ Day” and “Boys’ Day” events
of health in the workplace.
in both Hamburg and its Hamminkeln location. Practical taster
sessions offer young girls and boys the chance to find out
E MPLOY E R B R A NDING: P OSITIONING
TO M TA ILOR A S A N AT TR AC TI V E E MPLOY E R
about interesting activities in different professions.
In July 2013, the Employer Branding launch event took place
in Hamburg. Positioning the TOM TAILOR GROUP as an em
PROFE SSION A L DE V E LOPME NT I S KE Y
TO LONG -TE RM COMPA N Y SUCCE SS
ployer brand starts with how the Company is viewed internally.
The TOM TAILOR GROUP is preparing to meet the foreseeable
A team of employees worked with the personnel depart-
consequences of demographic trends. Retaining employees
ment in a project to develop a value framework for this. This
at the Company and ensuring their professional development
essentially comprises elements such as mutual respect,
play an important role in this. The TOM TAILOR GROUP sup
responsibility, honesty, justice and enthusiasm, which are laid
ports and assists its employees in achieving their career goals
down in a code of conduct. Employees from different areas
by focusing on individual, needs-based professional devel
are at present taking part in workshops which aim to make the
opment and on specialised training. In September 2013, the
TOM TAILOR GROUP brand attractive to current employees
Company launched the pilot version of its Fach- und Füh-
and, as a second stage, to potential future employees as well.
rungsskräfte-Entwicklungsprogramm (FEP), a development
programme for specialists and management employees.
The programme is aimed at sales and marketing staff and
Teilzeit
70,5%
Employees
37
Mitarbeiter nach Altersklassen
31. Dezember 2013
unter
lasts 25
forJahre
approximately two years.
comprises a number of
8 ,It
5%
theoretical and practical modules, and on completion par
25 bis 30 Jahre
10,7%
ticipants are awarded a certificate.
The programme aims to
Employees by Working Time
equip participants with the foundations they need to take on
31 bis 35 Jahre
,3%
further professional and9management
responsibilities.
36 bis 40 Jahre
9%
A YOU NG TE A M/FA7,MILY-FR
IE N DLY
41
bis 45 Jahre
WORK
OP TION S
13,0%
Full-time
29.5%
über 45 Jahre
5 0 ,in
6%
The average age of TOM TAILOR employees
the central areas
(i.e. above all product development, wholesale distribution,
logistics and administration) excluding the retail stores was
34 in 2013. The average age at BONITA was 49. In the retail
stores, the average age was 33 at TOM TAILOR and 49 at BONITA.
Part-time
70.5%
This translates to an average age across the TOM TAILOR
GROUP of 43.
Employees by Age Group
S TRONG TE A M S PIR IT A N D OPE N
COMM U NIC ATION
The TOM TAILOR GROUP encourages open communication
between its employees. As such, it is important that
under 25 years
25 to 30 years
31 to 35 years
36 to 40 years
41 to 45 years
over 45 years
employees can communicate with each other and in doing so
8.5%
develop a strong sense of loyalty to the Company. Direct
10.7%
communication with supervisors without long communica
tion chains, quick decisions and flat hierarchies are other
9.3%
key elements of the Group’s personnel policy and of the cor
porate culture. Employees are regularly and promptly
7. 9 %
13.0%
informed of all events that are relevant to the Company via
the intranet.
50.6%
The concept of open communication also extends to internal
Company events such as TOM’s Club. The entire TOM TAILOR
A good work-life balance is a key concern for many of the
workforce in Germany and abroad are invited to attend this
Group’s employees. Thanks to its flexitime, part-time and
event, which takes place once a quarter. At TOM’s Club,
job-sharing models, the TOM TAILOR GROUP enables its em
colleagues have the opportunity to exchange ideas and expe
ployees to customise their work to suit themselves to a
riences, particularly across departments. A summer party
large extent. Across the Group as a whole, 71% of employees
and a Christmas party are also held every year in recognition
work part-time –34% at TOM TAILOR and 90% at BONITA.
of employees’ efforts.
38
S ustainability an d
R esponsibility
C O N T I N U A L LY E X T E N D I N G
OUR
C O R P O R AT E C O M M I T M E N T
As a fast-growing company, the TOM TAILOR GROUP also pays
particular attention to employee education, training and
professional development. For example, it offers practical,
needs-based education and training programmes in the
various functional areas. The Company also supports employ
In a global industry such as textiles, credible corporate respon
ees’ professional development in the form of specifically
sibility towards employees, customers, suppliers and the
tailored projects (for example, as part of its cooperation with
environment is becoming a more and more important com
the Akademie für Mode und Design [AMD – Academy of Fashion
petitive factor.
and Design]). In this way, the TOM TAILOR GROUP is able to
align society’s interest in giving young people access to for
As a fast-growing fashion group with an international pres
ward-looking vocational training with its own interest in re
ence, the TOM TAILOR GROUP takes this corporate responsi
cruiting and retaining talented and well-educated employees
bility very seriously – which is why the principle of sustainable
for the long term.
corporate management is a core component of its business
policy. This includes a well-balanced social and human resourc
In 2012, the Group launched its Health in the Workplace initia
es policy as well as trusting relationships with the Group’s
tive, in collaboration with an external coaching institute.
business partners. The Company places particular emphasis
The core element of this initiative is the Employee Assistance
on decent, safe and fair working conditions at its supplier
Programme, an external counselling programme. The insti-
operations, on reducing its environmental footprint in the pro
tute advises TOM TAILOR GROUP employees, who remain anon
duction process and on high product quality. Given the events
ymous, in highly stressful situations on questions concern-
in the past year in factories in Bangladesh, for example, the
ing their work, private life or health. The objective is to address
TOM TAILOR GROUP intends to strengthen this commitment,
potential physical and psychological problems among em
particularly with regard to the production process.
ployees and management at an early stage, in order to main
tain their health.
The TOM TAILOR GROUP sees its commitment to sustainability
as a process of continuous improvement.
In 2013, the TOM TAILOR GROUP launched its Employer Brand
ing initiative, with the aim of establishing the Group with its
two brands, TOM TAILOR and BONITA, as an attractive employ
DEVELOPING
A N D SU PP O R TIN G E M PL OY E E S
I N M A N Y D I F F E R E N T W AY S
er both internally and externally. Positioning TOM TAILOR as
an employer brand is intended to have a lasting positive impact
on employee recruitment and retention, as well as on their
motivation and the corporate culture. To do this, the Company
developed an employer motto and eleven corporate values.
The TOM TAILOR and BONITA employees discussed the values
As a socially committed employer, the TOM TAILOR GROUP
in working groups and imbued them with life. In 2014, the fo
focuses in particular on its employees. Fair pay is part of
cus is on strengthening our employer branding both internally
this; the Company ensures this using a variable compensation
and externally. Internally, further campaigns, lectures and
system and supplements it with a large number of volun-
workshops will be held to flesh out the TOM TAILOR GROUP’s
tary contributions. Among other things, these comprise
defined values as an employer brand. In addition, the Group
Company pension plan benefits above and beyond the statu
will launch its new recruitment website.
tory provisions, and contributions to occupational disability
cover.
39
Detailed information can be found in the section entitled
Sumangali is a widespread form of employment in this region,
Employees on pages 35 to 37 of this Management Report.
in which young women undertake to work in factories for
sev-eral years. The idea is that the girls can save for a dowry,
which is a prerequisite for getting married. They are only paid
TA K I N G R E S P O N S I B I L I T Y
WHERE IT IS NEEDED IN
THE PRODUCTION PROCESS
the majority of their salary when they have completed this
multi-year period. This widespread practice in southern India
frequently results in a number of types of forced labour.
The TNMS is conducting systematic educational campaigns on
the ground, including training suppliers, holding discussions
with legislators in the area, and setting up local community
The TOM TAILOR GROUP’s collections are mainly manufactured
and training centres.
in Asia, where the majority of global textile production takes
place. The extended supply chains in the textile industry require
a high degree of responsibility on the part of all market par
ticipants, in order to guarantee decent, safe and fair working
conditions at suppliers. The TOM TAILOR GROUP is therefore
participating in a number of dedicated projects and initiatives.
FOCUS
ON THE ENVIRONMENT
taken to observe the principles drawn up by the Business
Initiating and Supporting E nviron
mental Pro jec ts and Initiatives
Social Compliance Initiative (BSCI). This code of conduct in
By joining the BSCI and voluntarily signing up to its code of
cludes all the key standards of the International Labour
conduct, the TOM TAILOR GROUP has undertaken to comply
Organisation (ILO) as well as other international conventions
with national environmental protection legislation. However,
For example, the TOM TAILOR GROUP has voluntarily under
and guidelines. These include a ban on abusive child labour,
depending on the individual national regulations, the Com-
safe and decent working conditions, fair pay, regulated work
pany does not always consider the local regulations to be suf
ing times, adherence to local laws, no discrimination and
ficient to guarantee adequate environmental protection in
workers’ freedom of association to form unions and freely ne
the production countries.
gotiate rates. All of our supplier operations have undertaken
to allow accredited agencies into their companies to perform
The TOM TAILOR GROUP co-founded the Carbon Performance
regular checks. Before the TOM TAILOR GROUP works with
Improvement Initiative (CPI2) in 2011 together with other
suppliers, social officers check to ensure they adhere to all the
retail and branded goods companies under the umbrella of the
BSCI standards. These officers are trained employees of BSCI-
Außenhandelsvereinigung des Deutschen Einzelhandels e.V.
accredited agencies and TOM TAILOR’s own local purchasing
(AVE – Foreign Trade Association of the German Retail Trade).
company. If the inspection is successful, the TOM TAILOR GROUP
This initiative aims to reduce CO2 emissions significantly with-
enters into an agreement with the supplier concerned.
in individual companies’ supply chains. In the emerging and
Over the course of the cooperation, regular supplier audits
developing countries, huge potential savings in CO2 emissions
and checks are performed by the auditors; these will take
can be made simply by raising awareness of the problem and
place unannounced up to twice a year from 2014. In 2013, the
by making what are in some cases simple changes. To do this,
TOM TAILOR GROUP’s social officers received intensive further
the CPI2 initiative has developed a management tool for
training. From 2014, they will increasingly carry out their own
producers in these countries with concrete recommendations
fire prevention checks at suppliers’ premises.
on how to save energy.
In addition, the TOM TAILOR GROUP has been a member of the
Following the encouraging completion of its pilot phase in
Tamil Nadu Multi-Stakeholder Group (TNMS) since 2012.
early 2012, the TOM TAILOR GROUP has held seminars in Ban-
The TNMS Group is an association combining the Ethical Trading
gladesh, China, India, Vietnam and Turkey. About 40 of the
Initiative (ETI) and individual BSCI members. The group is
Group’s suppliers are currently involved in the CPI2 project and
taking a determined stand against the custom of Sumangali in
are at the stage of establishing their existing CO2 emissions.
southern India, with the aim of eradicating the practice.
In 2014, all TOM TAILOR GROUP suppliers are expected to parti
40
cipate in the project. The first task is to obtain an overview
cultivation standards, which are internationally recognised,
of the factors causing suppliers’ CO2 emissions. After that,
and the national programmes in Japan, the USA and India.
targets for cutting CO2 emissions will be set for each individu
The TOM TAILOR GROUP sources its organically produced cot
al supplier, taking into account their respective starting situ
ton from certified suppliers complying either with the leading
ations, and measures will be taken to achieve them. In 2014,
global certification standard, “GOTS” (Global Organic Textile
the CPI2 initiative plans to extend its activities to other envi
Standard), or the “Organic Exchange 100” standard. The aim is
ronmental issues such as water and in doing so help to reduce
to steadily increase the proportion of products made from
water consumption in the production process.
organic cotton year on year.
Another project that the TOM TAILOR GROUP has been actively
In 2013, the TOM TAILOR GROUP also addressed the issue of
involved with for many years is the “Aid by Trade” foundation’s
recycled cotton and the first products incorporating a certain
“Cotton made in Africa” (CmiA) initiative. This initiative takes
proportion of recycled cotton arrived in the shops. In the
a business-based approach to improving the living and working
“Tribute to Bambi” fundraising campaign, for example, the
conditions of cotton farmers in Africa, focusing on the three
TOM TAILOR organic cotton charity jeans contained 15% re
principles of “Profit, People, Planet”. The cotton farmers are
cycled cotton. In addition, using laser beams in the production
trained in modern, efficient, environmentally friendly methods
process reduced water consumption.
of cultivation that help them to improve the quality of their
ing concept also extends to children, who are to benefit from
High- Quality Produc ts Help to
Protec t the E nvironment
improved school education. The “Cotton made in Africa” pro
The TOM TAILOR GROUP offers consumers high-quality, fash
jects are financed by licence fees, which are paid to the ini
ionable casual wear with an attractive value proposition. In
tiative by partner companies such as the TOM TAILOR GROUP
order to guarantee this high standard of quality, the Company
in return for the right to sell specified quantities of products
checks the entire process along the value chain. Each item
made from CmiA cotton. In 2013, the TOM TAILOR GROUP sold
of clothing is subject to a variety of quality controls from pro
a comparable number of products manufactured using CmiA-
duction through to delivery to the point of sale. These include
certified cotton as in 2012.
checking the general workmanship and fit, as well as checking
cotton and raise their income through higher yields. The train
to see whether the processed materials fulfil the Group’s
Increasing the Use of Organic
an d Rec ycle d Cotton
strict quality and material requirements.
For some years now, the TOM TAILOR GROUP has also used
Because of its high quality, clothing from the TOM TAILOR
organic cotton in selected products. This supports the transi
GROUP is extremely durable. Seen in terms of the entire life
tion from conventional, resource-intensive cotton cultivation
cycle – from growing the cotton to the ultimate disposal of
towards more ecologically balanced cultivation methods.
the product by consumers – a high quality standard therefore
Organic cotton is produced in accordance with the EU’s organic
also makes a key contribution to protecting the environment.
Corporate Governance Statement
41
Corporate G overnan c e
S tatement
The Corporate Governance Statement in accordance with
§ 289 a of the Handelsgesetzbuch (HGB – German Commercial
Code) can be found in the Corporate Governance Report of
the Annual Report and on TOM TAILOR Holding AG’s website
http://ir.tom-tailor-group.com
Remuneration of Management Board
and Supervisory Board Members
42
R E M U N E R AT I O N
OF MANAGEMENT BOARD
AND SUPERVISORY BOARD
MEMBERS
The remuneration report explains the structure and the
The variable remuneration components for financial year
amount of the remuneration paid to the Management Board
2013 are EUR 2,860 thousand for Mr Holzer, EUR655 thousand
and the Supervisory Board members. Designing remunera-
for Dr Rebien, EUR 178 thousand for Dr Schumacher and
tion systems for the Management Board and the Supervisory
EUR 264 thousand for Mr Greiser. The fixed remuneration
Board members that provide incentives and reward per
components amounted to EUR 924 thousand for Mr Holzer,
formance in an appropriate manner is a key component of
EUR 594 thousand for Dr Rebien, EUR 268 thousand
responsible corporate governance.
for Dr Schumacher and EUR 520 thousand for Mr Greiser.
On 20 January 2010, the Supervisory Board resolved to imple
R E M U N E R AT I O N O F
THE MANAGEMENT BOARD
MEMBERS
ment a stock-based remuneration system (the Matching Stock
Programme, or MSP) for the members of the Management
Board. The MSP runs for a total of 14 years from the date of the
initial listing and serves to align the mutual interests of the
Management Board and the shareholders. A detailed descrip
tion of this remuneration system is provided in the notes.
The remuneration paid to the Management Board members
Measurement of the MSP on 31 December 2013 resulted in
comprises three components: a fixed basic remuneration
remuneration entitlements of EUR613 thousand for Mr Holzer
component, a variable remuneration component and a remu
and of EUR 232 thousand for Dr Rebien. These remuneration
neration component based on the long-term performance
entitlements will be paid out in 2014 at the earliest.
of the Company and the share price.
A Long-Term Incentive Programme (LTI) was introduced in July
The variable remuneration for the Management Board members
2010 for the TOM TAILOR GROUP’s management. It serves to
Mr Holzer, Dr Rebien, Dr Schumacher and Mr Greiser is based
retain personnel and achieve the Company’s long-term goals.
on the TOM TAILOR GROUP’s net sales figures and its recurring
The programme is also open to the members of the Man
EBITDA. Dr Schumacher has an additional remuneration com
agement Board. The remuneration system runs for a period of
ponent: the specific EBITDA performance in the retail segment.
eight years (starting in financial year 2010) and grants an ad
The Management Board members are permitted to use their
ditional, individual bonus based on a comparison of target and
company cars for private purposes as a fringe benefit. In addi
actual revenue and the operating result over a three-year
tion, accident insurance has been taken out for Dr Rebien,
observation period in each case. Share price performance is
Mr Greiser and Dr Schumacher and an endowment policy has
another component that is taken into consideration. Measure
been taken out for Mr Holzer. In the event that a member of
ment of the LTI programme as at 31 December 2013 resulted
the Management Board becomes unable to work, his salary will
in a total remuneration entitlement of EUR 930 thousand for
continue to be paid for a maximum of six months; in the event
Mr Holzer, EUR 374 thousand for Dr Rebien, EUR 237 thou-
of the death of a member of the Management Board, payments
sand for Dr Schumacher and EUR 28 thousand for Mr Greiser.
will continue for a maximum of 12 months. If Mr Holzer’s con
The portion from the second tranche, which was issued in
tract is terminated he is entitled to receive a fixed severance
2011, will become payable in 2014 (the first tranche became
payment in the amount of his fixed remuneration component for
payable in 2013) and amounts to EUR 548 thousand for
the remainder of his contract.
Mr Holzer, EUR213 thousand for Dr Rebien and EUR 131 thou
Remuneration of Management Board
and Supervisory Board Members
43
sand for Dr Schumacher. The remaining tranches from this
50,000 each to Dr Schumacher and Mr Greiser. The fair
remuner-ation system will be paid out after certain prerequi
value per share for type A (75% of the options issued) and
sites have been met, starting in 2015 at the earliest.
type B (25% of the options issued) option rights is EUR3.39
and EUR 2.77, respectively. Expenses were incurred for the
On 3 June 2013, the Annual General Meeting of TOM TAILOR
options in financial year 2013 in the amount of EUR 25 thou
Holding AG resolved a Company stock option programme
sand for Dr Rebien and EUR 13 thousand each for Mr Schu
in order to be able to grant stock option rights to members of
macher and Mr Greiser due to the allocation of expenses to
the Company’s Management Board, members of the manage
the periods until the options can potentially be exercised.
ment of affiliated companies and selected employees below
Management Board level of the Company, and below manage
ment level of affiliated companies (hereinafter referred to as
the Long-Term Stock Option Programme). The associated per
formance targets are measured on the basis of a multi-year
assessment and comply with the legal requirements of the
Aktiengesetz (AktG – German Stock Corporation Act) and the
R E M U N E R AT I O N O F
THE SUPERVISORY BOARD
MEMBERS
German Corporate Governance Code. The stock option rights
may be exercised no earlier than four years after the date of
In accordance with the Articles of Association, the members
issue. The stock option rights have a maximum term of seven
of the Supervisory Board receive fixed remuneration of
years from the date of issue. A detailed description of this
EUR40 thousand (the Chairman receives EUR 150 thousand
remuneration system is provided in the notes.
and the Deputy Chairman EUR75 thousand), plus compensation
for out-of-pocket expenses. This remuneration is payable
During the reporting period, a total of 485,000 of the 600,000 after the end of the Annual General Meeting that receives and
stock options available in 2013 were issued on 26 August 2013.
resolves on the approval of the consolidated financial state
Of these, 100,000 stock options were issued to Dr Rebien and
ments for the financial year in question.
D i s c l o s u r e s R e q u i r e d b y T a ke o v e r L a w
44
Dis c losures
require d by takeover law
in A c c or d an c e with
S e c tion 3 1 5 ( 4 ) of the H G B
( G erman Commer c ial Co d e )
an d E xplanatory R eport
The overriding goal of the TOM TAILOR GROUP’s management
capital increase on 8 August 2012 and has held 24.9 % of
team is to generate value for shareholders. This is why every
TOM TAILOR Holding AG’s share capital since that time.
proposed change of control and every takeover offer that
could realise hidden reserves and enterprise value, benefiting
On 8 August 2012, ISLA Vermögensverwaltungs GmbH joined
shareholders, is carefully analysed to establish the expected
the lock-up agreement signed on 20 June 2012 between
synergies and the future potential to add value. A change of
BONITA International GmbH & Co. KG, TOM TAILOR Holding AG
control is deemed to have occurred if a single shareholder or
and another shareholder in respect of these new shares.
a group of shareholders acting in concert acquires more than
Under this agreement, ISLA Vermögensverwaltungs GmbH is
30% of the outstanding voting rights as a result of a takeover,
prohibited from selling or otherwise disposing of the shares,
an exchange, or another form of transfer, or if, as a result of a
from entering into agreements or transactions in relation to
takeover or a reverse merger, the shareholders of TOM TAILOR
voting rights or other rights attached to these shares and
Holding AG hold less than 30% of the voting rights in the com
from performing any economically similar transactions or
bined entity after such a transaction has entered into force.
activities (derivatives) for a period of 36 months starting on
The TOM TAILOR GROUP has not established any specific defen
9 August 2012. This obligation does not apply under certain
sive mechanisms or measures against takeovers.
conditions in the case of a public takeover offer for TOM TAILOR
Holding AG’s shares. The shares held by ISLA Vermögensver
COMP OSITION OF SU BSCR IBE D C A PITA L
A ND VOTING R IG HT S
waltungs GmbH were assigned to a blocked custody account
under a separate securities identification number.
TOM TAILOR Holding AG’s subscribed capital (share capital)
as at 31 December 2013 was EUR 26,027,133.00 and is com
Also under the agreement, ISLA Vermögensverwaltungs
posed of 26,027,133 no-par-value registered shares. Each share
GmbH entered into an obligation to limit its equity interest in
grants the holder equal rights and a single vote at the Annual
TOM TAILOR Holding AG to a maximum of 24.9% of the voting
General Meeting.
rights until 31 December 2015. The voting rights held by and/or
attributable to ISLA Vermögensverwaltungs GmbH in ac
Restrictions Affecting Voting Rights
cordance with sections 21 ff. of the Wertpapierhandelsgesetz
or the Transfer of Shares
(WpHG – German Securities Trading Act) shall be decisive
In connection with the acquisition of the BONITA Group, ISLA
in this context. The obligation shall cease to apply if another
Vermögensverwaltungs GmbH (Warstein, Germany), formerly
shareholder informs the Company that it holds, or has attrib
BONITA International Verwaltungs GmbH, acquired 6,028,050
utable to it, more than 24.9% of the voting rights in TOM TAILOR
new shares in TOM TAILOR Holding AG as part of a non-cash
Holding AG.
45
EQU IT Y INTE RE S T S E XCE E DING
10% OF THE VOTING R IG HT S
2 June 2018 by up to a total of EUR 3,023,709 by issuing new,
To the knowledge of the Management Board, based on the
cash contributions (Authorised Capital 2013 II). The new shares
notifications received by the Company in line with the WpHG
shall generally be offered to shareholders for subscription
as at 31 December 2013, the following direct or indirect
(including by way of indirect subscription in accordance with
equity interests in the share capital of TOM TAILOR Holding AG
section 186(5) sentence 1 of the AktG).
no-par-value registered shares against cash and/or non-
exceed 10% of the voting rights:
However, the Management Board is authorised, with the
ISLA Vermögensverwaltungs GmbH directly holds 24.9 % of
consent of the Supervisory Board, to disapply shareholders’
the voting rights. These voting rights are attributable in full
statutory pre-emptive rights in the following cases:
to VERSORGUNGS- UND FÖRDERUNGSSTIFTUNG in accordance
–to eliminate fractions
with section 22 (1) sentence 1 no. 1 of the WpHG.
–in the case of capital increases against non-cash contribu
tions to grant shares for the purpose of acquiring companies, business units of companies, equity interests in com
To the knowledge of the Management Board, there are no
panies, or other assets or rights
further direct or indirect equity interests in the share capital
of TOM TAILOR Holding AG that exceed 10 % of the voting
–in the case of capital increases, if the issue price of the new
shares is not materially lower than the quoted market price
rights.
of the existing listed shares and the shares issued while
P OW E R S OF THE M A N AG E ME NT BOA R D
TO I SSU E S H A RE S
disapplying shareholders’ pre-emptive rights in accordance
The shareholders have authorised the Management Board to
a total of 10% of the share capital either at the time that this
issue new shares, options or conversion rights as follows:
authorisation comes into effect or at the time it is utilised.
with section 186(3) sentence 4 of the AktG do not exceed
This limit of 10% of the share capital must also include any
Authorised Capital
shares that are (i) issued or sold during the authorisation
The Management Board is authorised in accordance with sec
period subject to the disapplication of pre-emptive rights
tion 4 subsection 3 of the Articles of Association to increase
while applying section 186(3) sentence 4 of the AktG, either
the Company’s share capital in full or in part, with the consent
directly or with the necessary modifications, or that (ii) are
of the Supervisory Board, on one or more occasions until
or can be issued to service convertible bonds and/or bonds
2 June 2018 by issuing new, no-par-value registered shares
with warrants insofar as the bonds are issued after this
against cash contributions (Authorised Capital 2013 I). The
authorisation comes into effect subject to the disapplication
new shares shall generally be offered to shareholders for sub
of shareholders’ pre-emptive rights in line with section 186 (3)
sentence 4 of the AktG.
scription (including by way of indirect subscription in accord
ance with section 186(5) sentence 1 of the Aktiengesetz [AktG –
German Stock Corporation Act]).
The Management Board is authorised, with the consent of
the Supervisory Board, to specify the further details of
However, the Management Board is authorised, with the
the implementation of capital increases from Authorised
consent of the Supervisory Board, to disapply statutory pre-
Capital 2013 II.
emptive rights in full or in part to eliminate fractions.
Contingent Capital
The Management Board is authorised, with the consent of
In accordance with section 4 subsection 5 of the Articles of
the Supervisory Board, to specify the further details of
Association, the share capital has been contingently increased
the implementation of capital increases from Authorised
by up to EUR2,400,000 by issuing up to 2,400,000 no-par-
Capital 2013 I.
value registered shares (Contingent Capital 2013). The sole pur
pose of the contingent capital increase is to grant shares to
The Management Board is authorised in accordance with sec
the holders of stock option rights under the Long-term Stock
tion 4 subsection 4 of the Articles of Association to increase
Option Programme. The Management Board was authorised
to grant these shares by way of a resolution by the Annual Gen
eral Meeting on 3 June 2013. The contingent capital increase
46
will only be implemented to the extent that the holders of stock
The Supervisory Board may appoint a chairman of the Man
option rights granted on the basis of the authorisation by the
agement Board and a deputy chairman.
Annual General Meeting on 3 June 2013 exercise these stock
option rights and the Company does not settle the stock option
Generally speaking, the Annual General Meeting is respon
rights by delivering own shares or by making a cash payment.
sible for making amendments to the Articles of Association
in accordance with section 179(1) of the AktG. In accordance
The new shares participate in profits from the beginning of
with section 15 of the Articles of Association, however, the
the financial year for which the Annual General Meeting
Supervisory Board is authorised to resolve amendments to
has not yet adopted a resolution on the utilisation of the net
the Articles of Association in cases that affect the wording
retained profits at the time the new shares are issued.
only, for example amendments to the share capital resulting
from a capital increase from authorised capital. Insofar as
The Company’s Management Board is authorised, with the
the Articles of Association do not specify any other majority,
consent of the Supervisory Board, to specify the further
resolutions of the Annual General Meeting on amendments
details of the implementation of the contingent capital in
to the Articles of Association in accordance with section 179 (2)
crease, unless stock option rights and shares are to be
of the AktG require a majority of at least three-quarters of
granted to members of the Company’s Management Board;
the share capital represented when the resolution is adopted.
in this case, the Supervisory Board shall specify the fur-
Section 20 subsection 1 of the Articles of Association of
ther details of the implementation of the contingent capital
TOM TAILOR Holding AG specifies that a simple majority of
increase.
the votes cast and a simple majority of the share capital
represented at the time of the resolution shall be sufficient
TOM TAILOR Holding AG has not issued convertible bonds or
for a majority of the votes and a majority of the share capi
bonds with warrants in the past three years, nor are there any
tal respectively, unless the law or the Articles of Association
such bonds outstanding.
require otherwise.
AUTHOR I SATION OF THE M A N AG E ME NT
BOA RD TO BU Y BACK OW N S H A RE S
TOM TAILOR Holding AG is a party to the following agree-
As at 31 December 2013, TOM TAILOR Holding AG was not
ment, which contains certain conditions governing a change
authorised to buy back own shares.
of control following a takeover offer:
APPOINTMENT AND DISMISSAL OF MEMBERS
OF THE MANAGEMENT BOARD, AMENDMENTS
TO THE A R TI CLE S OF A SSO CI ATION
The Company has entered into a syndicated loan agreement
The appointment and dismissal of the members of the Manage
the bank finance granted in the case of a change of control at
ment Board of TOM TAILOR Holding AG are regulated by sec
the Company (i.e. if one or more persons (acting in concert)
tions 84 and 85 of the AktG in conjunction with section 6 of the
directly or indirectly acquire more than 30 % of the voting
Articles of Association. According to section 6 of the Articles
rights in the Company). In the event that one or more lenders
of Association, the Management Board consists of at least two
terminate the loan agreement due to a change of control,
persons. Apart from this provision, the Supervisory Board de
the bank finance provided by the lenders that terminated the
termines the number of members of the Management Board.
agreement must be repaid pro rata.
CH A NG E OF CONTROL
with a consortium of banks. This agreement contains a change
of control clause, which requires the early repayment of
47
Risks and
O p p or t u n i t i e s
In the course of its business activities, the TOM TAILOR GROUP
using appropriate countermeasures. Another goal is to sys
is exposed to a large number of risks and opportunities asso
tematically leverage opportunities that arise as a result of
ciated with operating any business. Risks refer to events that,
market developments without ignoring the associated risks,
if they occur, result in negative deviations from targets planned
and to ensure that an acceptable risk profile is maintained.
for the future. If they materialise, these risks can hamper busi-
Our risk policy is focused on the goal of consolidating and
ness development for the long term, depress earnings growth
expanding the TOM TAILOR GROUP’s position in the markets,
and endanger the Company’s net assets and financial position.
so as to permanently increase its enterprise value.
In contrast, opportunities refer to circumstances that could
have a positive effect on the TOM TAILOR GROUP’s future per
A central component of our risk policy is therefore only
formance.
to take on risks if the associated business activities are
highly likely to increase the value of the TOM TAILOR GROUP.
The aim of risk and opportunity management is to identify
A precondition for this is that the risks remain reasonable
risks at an early stage, to control them and to reduce them
and manageable at all times.
48
R ISK M ANA G E M ENT
To begin with, risks to the TOM TAILOR GROUP are identified.
Identifying all risks is the most important phase in the risk
management process because this step forms the basis for all
The TOM TAILOR GROUP uses a risk management system to
downstream phases. A set procedure is used and all sources
counter business risks. This is an integral part of its business
of risk are analysed in order to ensure maximum success. A risk
processes and a key element in corporate decisions. In add-
catalogue provides an overview of the existing categories
ition to monitoring risks within the Company, the role of the
of risks to the TOM TAILOR GROUP. During risk inventories, the
risk management system is also to establish an early warning
relevant risk owners are required to identify any new sources
system that identifies future risks at an early stage, monitors
of risk and to reassess existing sources of risk if necessary.
them, and allows the risk management function to react in
The risks identified are then assessed in the next step. Risks
a timely manner and to limit risks using appropriate manage
are first captured in accordance with the “gross principle”,
ment measures. The TOM TAILOR GROUP’s risk management
i.e. without taking the impact of any measures implemented
system is based on a special software solution. This offers a
into account. Our risk management process is designed to en
comprehensive, management-oriented approach, which is
Risikomanagement der TOM TAILOR GROUP
based on manual and IT-based approval processes as well as
sure that the quantitative and qualitative aspects of relevant
Stand: 31. Dezember 2013
systems-based processes for processing Group data. This
losses and probability, and are prioritised in line with this as
software solution is the heart of the risk management system
low, medium, or high risk. The following tables describe the
Risiko with its overarching
formal structures and
concrete measures,
Risikobewertung
TOM TAILOR GROUP’s risk indicators.
identifizierung
risks are evaluated as fully as possible to establish potential
which provide the staff responsible with a precise flowchart
for dealing with risks within the Company.
Risk Classification: Probability of Occurrence
Group-wide risk management is centrally coordinated and
Risikoüberwachung
managed
from the Company’s headquarters
in Hamburg.
Risikosteuerung
Very low
Up to 5%
Potential risks that may arise in connection with business
Low
From 5% to 25%
activities are identified at an early stage, assessed, mitigated
Medium
From 25% to 60 %
using appropriate management measures and monitored.
High
From 60 % to 100 %
und -Reporting
Local risk management at the subsidiaries implements the in
structions received from headquarters and supplements
these by additional operational risk management activities onsite. At the same time, the risk management system serves
Risk Classification: Potential Losses
to optimally leverage opportunities that arise in keeping with
the corporate strategy.
Low
Limited negative effects on business
activities, financial position,
results of operations and cash flows
EBITDA: EUR 0 to 1 million
Moderate
Some negative effects on business
Material
Significant negative effects on business
Severe
Damaging negative effects on business
EBITDA: more than EUR 15 million
Risk Management of the TOM TAILOR GROUP
Risk identification
Risk monitoring &
risk reporting
Risk assessment
Risk management
wahrscheinlichkeit
hoch
M
H
H
H
mittel
M
M
H
H
gering
G
M
M
H
49
sehr gering
G
G
M
M
Schadensausmaß
niedrig
moderat wesentlich gravierend
Risks are classified as “low”, “medium” or “high” depending
nised during risk monitoring and incorporated into the risk
on their probability of occurrence and their effects on the
management process. Risks are also subject to change over
financial position and results of operations. They are shown
the course of time. Furthermore, the extent of the losses
in the assessment matrix below.
and probability of occurrence change as a result of such devel
opments, or the overall framework. In all of these cases,
renewed identification and assessment is crucial. Risk report
Assessment Matrix
ing, another element of the risk management system, informs
L Low risk
M Medium risk
the Company’s management of the results of the preceding
phases of the risk management process. This reporting gives
H High risk
the Company’s management a clear, decision-oriented over
view of all risks to the Company and of specific risks in the
Probability
of Occurrence
individual areas of responsibility.
High
M
H
H
H
Medium
M
M
H
H
Low
L
M
M
H
Very low
L
L
M
M
Low
Moderate
Material
Severe
In the risk monitoring phase, the risk management cycle
constantly starts over again so as to take into account the
changes to the overall framework at all times. This com
prehensive risk management system is designed particularly
to identify developments that threaten the continued
Effect
existence of the Company at an early stage and to allow the
Management Board to manage these by taking appropriate
measures.
Risk owners are defined for all risks depending on their signif
icance. Risk management aims to positively alter the Com
For the TOM TAILOR GROUP, risk management also means
pany’s risk position and/or to balance earnings (opportunities)
that the Company’s management and all employees are aware
with the risk of loss (risks) in order to increase the Company’s
of the risks associated with their activities, so that they
enterprise value. Risk management encompasses all meas
can independently identify risks, assess them and initiate their
ures that influence the risk situation by reducing either the
management in line with the Company’s objectives.
probability of occurrence and/or the extent of the losses.
This phase of the process aims to avoid unacceptable risks and
to reduce and transfer unavoidable risks to an acceptable
degree. Optimal risk management therefore increases the
Company’s enterprise value by enhancing its risk position.
With respect to the form of the risks, the TOM TAILOR GROUP’s
risk management system provides for several strategies
A C C O UNTIN G - R E L ATED
INTE R NA L R ISK
C O NT R O L S Y STE M
to manage risks: avoiding risks by not doing the business in
question, mitigating risk or transferring operational risk to
The Management Board has established an accounting-relat
insurers. This largely neutralises the financial consequences
ed internal control system for the wide variety of organisation
of insurable risks such as property damage, business inter
al, technical and business procedures so as to ensure proper
ruptions or bad debt losses. In turn, other risks are assumed
bookkeeping and accounting as well as the reliability of finan
by suppliers, for example.
cial reporting in the consolidated financial statements and
Group Management Report. As a core component of the Group’s
The success of risk management depends to a great extent
accounting process, this comprises preventive, monitoring
on whether planned measures for improvement are actually
and detection measures designed to ensure security and con
implemented and checked for effectiveness. After all, only
trol. A key tool is the principle of functional separation, supple
effectively implemented measures that are also appropriate
mented by high-level controls, to ensure that corporate
from a cost perspective contribute to increasing the enter
processes are not handled by a single person. Consequently,
prise value. Risk monitoring is responsible for this in the final
employees only have access to the specific processes and
step of the process. In addition, new risks should be recog
data that they need to do their job.
50
Close contact is also maintained with the auditors throughout
Although we consider the probability of occurrence of this
the year with respect to new statutory provisions and new
risk to be low, we cannot completely rule out negative
or unusual transactions. The consolidated financial statements
effects on the net assets, financial position and results of
are prepared centrally by Company employees using certified
operations of the TOM TAILOR GROUP. We classify this risk
consolidation software. The employees concerned have many
as medium.
years of experience and expert knowledge of consolidation
issues and IFRS accounting. Standardised reporting packages
Fluctuations in Supply and Demand
that include all the information required for full IFRS con
Fluctuations in supply and demand on the procurement mar
solidated financial statements are used by subsidiaries for
kets may result in supply/capacity bottlenecks at suppliers,
reporting to the parent.
increased production costs and higher logistics costs. It might
not be possible for the TOM TAILOR GROUP to offset these
higher costs in full or in part by raising the prices of its prod
R ISKS
ucts. The availability and supply and the price of cotton, a raw
material which makes up a significant portion of procurement
costs, as well as sufficient production capacity are particu
The following describes the risk factors that could have
larly important factors here. Overall, the probability of both
material negative effects on the net assets, financial position
factors occurring is considered to be low, and the extent of
and results of operations of the TOM TAILOR GROUP as well
losses material. The TOM TAILOR GROUP counters these risks
as on its reputation. The classification used the same risk cate
with a focused supplier policy that concentrates on reliable
gories as those used in the internal risk management system,
partners on the one hand and on further expanding its retail
in summarized form. The order in which the risks are presented
business on the other. This ensures a greater level of flexibi-
within the five categories reflects the current assessment
lity with respect to margins and means that price fluctuations
of the relative degree of risk for the TOM TAILOR GROUP, and
on the supplier markets can be better offset. The Company
hence provides an indication of the present significance of
is able to react to critical early warning indicators at an early
these risks. Unless specified otherwise, all risks relate to all of
stage via its system of advance orders and price negotiations
the TOM TAILOR GROUP’s segments.
for commodities and production capacity.
The risks that are relevant to the TOM TAILOR GROUP can
In December 2011, the Company started establishing its own
be divided into five categories: external, strategic, financial,
purchasing company in Hong Kong to optimise and quickly
operational and company-related risks.
identify risks as well as to introduce measures to reduce them.
This company has been in operation since August 2012, and
E X TE RNA L R ISKS
has centrally organised and monitored all of TOM TAILOR’s pur
Economic Development
chasing activities in Asia since then. As from February 2014,
Continuing weak economic growth or a worsening economy,
purchasing for the BONITA collections will also be routed via
particularly in the Group’s domestic market of Germany,
this TOM TAILOR purchasing company. Although we assess
could negatively affect overall consumer demand and hence
the occurrence of this risk to be low, we cannot completely
also demand for TOM TAILOR GROUP products. This could
rule out negative effects on the net assets, financial posi-
result in declining sales and pressure on margins. Moreover,
tion and results of operations of the TOM TAILOR GROUP. We
the core clothing markets on which the TOM TAILOR GROUP
classify this risk as medium.
is present are largely dominated by fierce competition
that might intensify further in the future, primarily due to
Country Risks
increased consolidation among fashion companies in Ger
As an international fashion company, the TOM TAILOR GROUP
many. The TOM TAILOR GROUP’s net assets, financial position
is exposed to various country risks. These include macroeco
and results of operations could be affected by this in the
nomic, political and legal risks, among others.
long term. The extent of potential losses for the Group from
a negative economic trend are considered to be material,
The conditions in some of the countries that the TOM TAILOR
but they have a low probability of occurrence at present due
GROUP operates in are different to those in Western Europe
to the current positive economic indicators for 2014.
and there is less macroeconomic, political and legal stability.
51
This applies both to the countries from which the TOM TAILOR
holders, for example shareholders, customers, suppliers
GROUP sources its products and to the countries where these
and employees. Failure to comply with laws, standards and
products are sold or are to be sold in the future. With respect
guidelines could negatively affect this perception and thus
to procurement, China – where some of the producers for the
damage the corporate image. If the Group does not succeed
TOM TAILOR GROUP are located – is worth particular mention.
in continuing to expand its brand image and positioning its
On the sales side, the conditions in, for example, South-Eastern
brand with an appropriate degree of exclusivity, or if its repu
Europe, Russia and China are different to those in Western
tation is damaged or lost, this could have a lasting negative
Europe. As the TOM TAILOR GROUP generates 89.4% of its
effect on the TOM TAILOR GROUP’s growth prospects. The
revenue in its core markets (Germany, Austria, Switzerland,
probability of this risk occurring is considered to be low, but
the Netherlands, Belgium and France) and can respond flexibly
it would have material effects on the Group. Although we
to changes in the procurement countries via its purchasing
assess the probability of occurrence of this risk to be low, we
company, the probability of occurrence is assessed as low to
cannot completely rule out negative effects on the net assets,
medium and the losses as moderate. However, this risk will
financial position and results of operations of the TOM TAILOR
become increasingly significant in the future as a result of the
GROUP. We classify this risk as medium.
Group’s growth strategy. Although we assess the probability
of occurrence of this risk as low to medium, we cannot com
Trendspotting and Pricing
pletely rule out negative effects on the net assets, financial
One of the reasons why the TOM TAILOR GROUP is performing
position and results of operations of the TOM TAILOR GROUP.
so well on the market is because it rapidly identifies and im
We classify this risk as medium.
plements current trends and distributes them promptly to the
points of sale. If the Group is unsuccessful in rapidly identifying
Force Majeure Risks
current trends and catering to the tastes of its target groups
The TOM TAILOR GROUP has no influence over disruptive
in the target markets it supplies, in pricing its products appro
events such as natural and environmental disasters, wars,
priately, or in successfully developing and launching new
‘terrorism, accidents, fires, epidemics, criminal activities,
products, this could have a negative effect on the TOM TAILOR
sabotage or disruptions to infrastructure. The occurrence of
GROUP’s competitive position, growth opportunities and prof
such events could lead to damage to the Company or to
itability. The probability of this risk is assessed as medium, and
partner and supplier companies both in Germany and abroad.
its impact on the Group as moderate. Although we consider
Any resulting damage, for example to production facilities
the probability of occurrence of this risk to be medium, we can
or buildings, could have a negative effect on the TOM TAILOR
not completely rule out negative effects on the net assets,
GROUP’s business activities and hence on its revenue and
results of operations as well. The extent of losses is reduced
GROUP. We classify this risk as medium.
by safeguards, such as taking out appropriate insurance
policies, and is therefore assessed to be only moderate with
Investment and Cost Risks
a very low probability of occurrence. Although we assess
The expansion in the retail segment in particular is increasing
the probability of occurrence of this risk to be very low, we
investment and cost risks due to the investments being made
cannot completely rule out negative effects on the net
in expanding the business, long-term rental agreements and
assets, financial position and results of operations of the
the inevitable associated rise in fixed costs. As part of the ex
TOM TAILOR GROUP. We classify this risk as low.
pansion process, investment decisions are analysed up front
for risk and cost-effectiveness so as to counter potential in
STR ATEG I C R ISKS
vestment and cost risks. As a result of this approach, and
Long-Term Positioning and Brand Image
des-pite the substantial expansion plans, the probability of a
The Group’s economic success is based on its brand image and
disproportionate increase in costs or of an unprofitable in
on the long-term strong positioning of its brands, TOM TAILOR
vestment is considered to be low, and the potential losses to
(TOM TAILOR, TOM TAILOR Denim and TOM TAILOR POLO TEAM)
be moderate. Although we assess the probability of occur
and BONITA. The TOM TAILOR brands cater to the 0- to
rence of this risk as low, we cannot completely rule out nega
40-year-old target group. The BONITA brand is aimed at the
tive effects on the net assets, financial position and results
over 40-year-old target group. The TOM TAILOR GROUP’s
of operations of the TOM TAILOR GROUP. We classify this risk
corporate image is reflected in the perception of its stake
as medium.
52
FINAN CIA L R ISKS
The majority of items procured by the TOM TAILOR GROUP are
Liquidity Risk
invoiced in US dollars. The US dollar/euro exchange rate is
Managing liquidity risk is one of the core tasks performed by
subject to considerable fluctuations at times. The net assets,
the Group’s headquarters. Liquidity risk is the risk that payment
obligations cannot be met or cannot be met on time because
GROUP could be significantly negatively impacted by unfa
insufficient cash funds are available. The TOM TAILOR GROUP
vourable developments in the exchange rate between foreign
must also meet financial covenants as a result of its loan
currencies and the euro, particularly a substantial (and poten
agreements and the borrower’s note loans it has issued. In
tially rapid) increase in the value of the US dollar compared
order to ensure both the Company’s ability to pay and its
with the euro. The probability of occurrence is considered to
financial flexibility, a revolving liquidity plan and daily liquidity
be low. The TOM TAILOR GROUP entered into currency for
reports are generated to document cash inflows and out
wards in financial year 2013 and for 2014 in order to cover the
flows in both the short and medium term. In the past, the
risk posed by exchange rate fluctuations. A large part of the
management also exploited opportunities that arose to lock
risk arising from exchange rate fluctuations can be minimised
in existing financing for the long term and to negotiate the
using these currency forwards; the extent of losses in the
underlying conditions to the Group’s advantage. If existing
event that this risk were to occur is considered to be moderate
credit lines and loans cannot be extended or new ones cannot
due to the currency hedges entered into for 2014. Although
be entered into, the losses from this risk would be material
we assess the occurrence of this risk as low, we cannot com
to severe. However, the probability of occurrence is assessed
to be low. Although we assess the occurrence of this risk to
be low, we cannot completely rule out negative effects on the
net assets, financial position and results of operations of the
TOM TAILOR GROUP. We classify this risk as medium-high.
Most TOM TAILOR GROUP invoices are issued in euros. This
means that the risk of exchange rate fluctuations on the
Credit Risk
revenue side is currently relatively minor. Since this risk is be
At present, credit risk only exists in relation to customers.
coming increasingly significant as a result of the Group’s
The Group’s main credit risk exists in relation to customers who
growth strategy in new sales markets, the TOM TAILOR GROUP
have been granted payment terms, and the associated coun
expects that the associated exchange rate risk will increase
terparty credit risk. In order to reduce this default risk in the
in future. The exchange rate risk arises from the cash flows in
operating business, outstanding amounts are monitored
the local currencies of the subsidiaries and the euro as the
centrally on an ongoing basis. The TOM TAILOR GROUP only
functional currency of the TOM TAILOR GROUP. At present,
does business with third parties with good credit ratings.
this risk is still assessed as involving low losses and a low
Credit checks are run on all customers wanting to do business
probability of occurrence. Although we assess the occurrence
with the Group on a credit basis. In addition, the risk is miti
of this risk as low, we cannot completely rule out negative
gated by taking out credit insurance policies and obtaining
effects on the net assets, financial position and results of op
collateral. For these reasons, credit risk in relation to custom
erations of the TOM TAILOR GROUP. We classify this risk as low.
ers is assessed as having a low probability and involving mod
erate losses. Although we assess the occurrence of this risk to
Interest Rate Risk
be low, we cannot completely rule out negative effects on
The Group is mainly subject to interest rate risk in the euro
the net assets, financial position and results of operations of
zone. Interest rate risk arises as a result of fluctuations in
the TOM TAILOR GROUP. We classify this risk as medium.
interest rates due to market-related factors. On the one hand,
these affect the TOM TAILOR GROUP’s interest expenses and,
Currency Risk
on the other hand, they influence the fair value of financial in
Currency risk in the TOM TAILOR GROUP is the result of the
struments. Substantial interest rate changes may therefore
international focus of the Group’s business activities.
have an impact on the Group’s profitability, liquidity and finan
This means that risks may arise as a result of exchange rate
cial position. A large amount of the loans taken out by the
fluctuations.
TOM TAILOR GROUP, particularly the syndicated loan facilities,
are pegged to reference interest rates and therefore incur
variable interest, as well as having short fixed interest rate
53
periods. This means that they are particularly vulnerable to
planned growth in the retail segment also requires addi-
interest rate risk and represent a cash flow risk. The interest
tional investment and increases the TOM TAILOR GROUP’s on
rate risk for some of the existing bank loans (amounting to
going rental and staff costs significantly. Additional risks
around EUR 50 million) has been hedged until the end of 2016
arise from delayed store openings and the resulting loss of
using an interest rate swap. The probability of interest rates
revenue. There is no guarantee that this increased expense
rising is assessed as very low due to the current low interest
compared to the wholesale segment can be offset by higher
rate policy in the eurozone and the extent of losses is consid
margins and that new Company-owned stores can be
ered to be moderate. Although we assess the probability of
operated at a profit.
occurrence of this risk as very low, we cannot completely rule
out negative effects on the net assets, financial position and
In the wholesale segment, the wholesale customers initially
results of operations of the TOM TAILOR GROUP. We classify
bear the sales risk in the majority of cases, particularly in the
this risk as low.
pre-order business. However, depending on the contractual
arrangements, the TOM TAILOR GROUP may also have to bear
OPE R ATIONA L R ISKS
the sales risk (in whole or in part). In particular, the Group
Sales and Inventory Risk
bears the sales risk in relation to the outlet business. This means
The TOM TAILOR GROUP is exposed to an increasing sales and
that the TOM TAILOR GROUP remains the owner of the goods
inventory risk due to the expansion of its own selling spaces in
until they are sold to the end customer. The outlet partner pri
the retail segments and of its controlled spaces in the whole
marily provides the selling spaces and handles the sale of the
sale segment (primarily the outlet business and the revenue
goods, in return for a commission. Sales risk also exists in rela
sharing model). This is because the inventory remains the
tion to individual revenue sharing models, i.e. where the
property of the TOM TAILOR GROUP until it is sold to the end
revenue generated is divided between the two parties to the
customer. Furthermore, the Company cannot rule out mis
contract according to a fixed ratio. In addition, a de facto/
takes when forecasting actual customer demand and sales,
goodwill return policy exists for major customers.
especially in the retail segments. Inventory surpluses may
arise if goods hitting the selling spaces at the Company’s own
In spite of detailed planning and monitoring of the controlled
stores are not sold off continuously before new goods are
selling spaces in both the wholesale and retail segments, and
added; this would lead to a reduction in revenue or to lower
the timely sale of surplus inventories at discounted prices, we
selling space productivity (revenue per square metre of “net
assess the probability of sales and inventory risk as low to
selling space”, i.e. selling space minus changing areas, tills,
medium, particularly due to factors that are beyond our con
lounges and shop windows). In financial year 2013, the BONITA
trol, and the losses as moderate to material. Although we
segment’s result in particular was impacted by low sales and
assess the occurrence of this risk as low to medium, we can
higher inventory levels in connection with a difficult market
not completely rule out negative effects on the net assets,
environment caused by the weather, changed design and
development processes and the change of collections this
GROUP. Overall, we classify this risk as medium.
required, and weaker-than-expected Christmas business.
The sell-off of surplus inventories at higher discounts in the
Quality Risk and Social/Environmental Risk
fourth quarter had a negative effect on the results of
Assuring the consistent high quality of the TOM TAILOR
operations.
GROUP’s products calls for close cooperation with suppliers
and other contract partners. One risk factor is a potential
Furthermore, difficult weather conditions may have a nega
decline in product quality or the use of illegal materials, raw
tive impact on the sale of TOM TAILOR products. For example,
materials and chemicals, which, even if used without the
mild winters can adversely affect the sale of winter clothes,
TOM TAILOR GROUP’s intention or knowledge, could lead to
and cool or rainy springs/summers can reduce revenue with
legal sanctions, particularly fines or claims for damages
spring/summer collections.
against the TOM TAILOR GROUP under product liability law.
Product or serial defects that only become apparent after
In addition, opening new stores in the retail segment is asso
sale to the end customer could lead to reputational damage
ciated with increased expense and uncertainty with regard
and recourse claims by both wholesale customers and
to future profitability. Opening its own stores as part of the
end customers against the TOM TAILOR GROUP, and could
54
materially impact sales of TOM TAILOR products. In order
strikes, the TOM TAILOR GROUP may be forced to source the
to ensure stable supply relationships and consistently high
affected products from other manufacturers. Changing manu
product quality at attractive prices for its constantly chang-
facturers could lead to delays in delivery to the TOM TAILOR
ing collections, the TOM TAILOR GROUP works with an inter-
GROUP’s customers and to considerable additional expense.
national network of purchasing agents and manufacturers
The Group’s claims for damages could be unenforceable under
in the sourcing area, which it has obliged to sign up to its code
certain circumstances. Furthermore, rapidly rising producer
of conduct. Currently, around 260 suppliers work for the
prices or disruptions to trade caused by external factors (for
TOM TAILOR GROUP. The code of conduct comprises all core
example, embargoes, restrictions on trade or on imports and
working standards issued by the International Labour Orga
exports, additional customs duties or import fees) can nega
nisation (ILO) and is binding for all partners. It aims to ensure
tively affect both procurement and the sale of the goods by
that the Group’s products are manufactured under decent
the TOM TAILOR GROUP. Natural disasters, accidents or in
working conditions in all production facilities. Inspections are
adequate power supplies at the manufacturers also represent
regularly performed at all production facilities so as to ensure
a risk. This is why the TOM TAILOR GROUP sources its products
compliance with high quality standards, labour law provisions
from a large number of different manufacturers. Overall, the
and internationally recognised standards on working condi
loss of one or more manufacturers is assessed as having a
tions. The individual manufacturers are primarily responsible
low probability and entailing moderate losses. Although we
for quality control, which involves manufacturing and check
assess the probability of the occurrence of this risk to be
ing the goods according to precise quality benchmarks.
low, we cannot completely rule out negative effects on the
net assets, financial position and results of operations of
Working conditions are monitored by independent accredited
the TOM TAILOR GROUP. We classify this risk as low.
auditors. The TOM TAILOR GROUP is an active member of
the Business Social Compliance Initiative (BSCI), a Europe-wide
Logistics Risk
initiative of retailers that have joined forces to impose a uni
Insufficient transport and warehouse capacities can lead to
form monitoring system on their suppliers. Additional quality
higher costs. In the event that a logistics partner becomes
checks are also performed at the central warehouse and in
insolvent, or if natural forces or accidents affect air and sea
the Company’s laboratory in Hamburg.
freight, deliveries of merchandise could be delayed or even
destroyed. This risk could affect scheduled deliveries to cus
The Management Board and Supervisory Board of Tom Tailor
tomers, which could in turn lead to increased claims for
Holding AG are explicitly committed to the principle of sus
damages and reputational damage. The extent of losses from
tainable management and explicitly acknowledge the Com-
this risk is assessed as moderate, with a very low probability
pany’s responsibility to its stakeholders and within society
of occurrence. Although we assess the occurrence of this risk
(corporate social responsibility). They are also aware of their
to be very low, we cannot completely rule out negative ef
responsibility to their customers, employees, shareholders,
fects on the net assets, financial position and results of oper
lenders, suppliers and retail partners.
ations of the TOM TAILOR GROUP. We classify this risk as low.
Overall, the TOM TAILOR GROUP believes that the probability
COMPAN Y-RE L ATED R ISKS
of quality risks and social/environmental risks arising is
Personnel Risks
low and that the extent of the associated losses is moderate.
Personnel risks mainly occur in relation to recruitment, in
Although we assess the probability of occurrence of this risk
adequate qualifications and employee turnover. As a success
as low, we cannot completely rule out negative effects on the
ful medium-sized company, the TOM TAILOR GROUP counters
these risks with continuous professional development meas
TOM TAILOR GROUP. We classify this risk as medium.
ures, performance-oriented remuneration and timely succes
sion planning as well as by maintaining a corporate culture
Production Risk
that lives by, and benefits from, good relations with all employ
If one or more of the TOM TAILOR GROUP’s manufacturers
ees. That having been said, the Group is particularly depend
were to become unavailable or fail to fulfil contractual obliga
ent on the Management Board and other managers. A loss of
tions either temporarily or permanently, for example due to
management staff could have a negative effect on business
economic or technical problems or to capacity bottlenecks or
performance. The TOM TAILOR GROUP also counters this risk
55
by creating a good working environment and instituting
payments, which may affect the growth and profitability of
attractive compensation arrangements that take long-term
the TOM TAILOR GROUP’s business activities, with potentially
objectives into account. Overall, the severity of this risk is
significant negative effects on the net assets, financial posi
assessed as moderate, and the probability of occurrence as
tion and results of operations of the TOM TAILOR GROUP. All
medium. Although we assess the probability of occurrence
existing and new agreements are reviewed and approved by
of this risk to be medium, we cannot completely rule out neg
the financial and legal department. Overall, the possibility of
ative effects on the net assets, financial position and results
the legal risks associated with the agreements described
of operations of the TOM TAILOR GROUP. We classify this risk
above materialising is considered to be low and their severity
as medium.
is considered moderate. Although we assess the probability
of occurrence of this risk to be low, we cannot completely rule
Breaches of applicable laws, particularly criminal acts, in the
first instance represent personal wrongdoing by the employee
committing them. However, if an employee breaks the
this risk as medium.
law during or in connection with their employment for the
TOM TAILOR GROUP, this also affects the Group. Any such
Legal risks typically arise from issues relating to labour law,
breaches of the law, cartel agreements, corruption or theft
tax law, intellectual property rights, product liability and war
may have negative financial consequences for the TOM TAILOR
ranties, as well as through the introduction of new statutory
GROUP under certain circumstances and may significantly
requirements or changes to existing laws or their interpretation.
damage its image. The Management Board therefore sees a key
Tax law risks include the risk relating to the usability of exist-
task of compliance to take measures and establish structures
ing losses carried forward at the level of TOM TAILOR Holding AG
that help to prevent employees within the Company commit
and potential tax risks from the TOM TAILOR GROUP’s inter-
ting breaches of the law during or in connection with their
national business. Legal risks could also entail reputational risks
employment for the TOM TAILOR GROUP. As a result of these
and could hence have a negative effect on the image of the
measures, the probability of this risk occurring is assessed as
Group and its brands. Existing legal regulations may be infringed
very low, and its impact as moderate. Although we assess the
through ignorance or negligence. In order to counter these
occurrence of this risk as very low, we cannot completely rule
risks in an appropriate and timely manner, potential risks are an
alysed thoroughly with the involvement of the legal and tax
department and, where necessary, external specialists. Despite
this risk as low.
these measures, the outcome of ongoing or future proceedings cannot be predicted with certainty. At present, only a few
Legal Risks
Group companies are involved in proceedings. Even if litiga-
The TOM TAILOR GROUP has entered into long-term agree
tion is resolved in the TOM TAILOR Group’s favour it can be cost
ments both with a number of lessors, such as the owners of
ly and could damage its image. Overall, the legal risks to the
the commercial building in Hamburg-Niendorf and the
TOM TAILOR GROUP are considered to entail a moderate extent
NORDPORT logistics centre, and with numerous wholesale
of losses and their probability of occurrence is seen as low. Al
contract partners and licensees. There are also a number of
though we assess the occurrence of this risk as low, we cannot
long-term leases relating to commercial space for TOM TAILOR
completely rule out negative effects on the net assets, finan
GROUP stores. This could lead to the TOM TAILOR GROUP be
cial position and results of operations of the TOM TAILOR GROUP.
ing unable to close unprofitable stores at short notice or at an
acceptable cost, or to terminate or renegotiate unprofitable
or disadvantageous contractual relationships in the short term.
As a fashion provider, the TOM TAILOR GROUP is subject to a
Even if the agreements permit the terms to be amended, for
number of statutory provisions stemming from the Lebens
example with regard to price and duration, there is no guaran
mittel-, Bedarfsgegenstände- und Futtermittelgesetzbuch
tee that this will be possible in practice or economically suf
(LFGB – German Food and Feed Code), which among other
ficient to ensure that the contract terms are appropriate. For
things prohibits the use of certain chemicals to dye textiles,
the above-mentioned reasons, it cannot be ruled out that
for example. These are sanctioned by criminal prosecution
the TOM TAILOR GROUP could be forced to comply with the
and heavy fines. Furthermore, under the Textilkennzeich
contract terms or possibly to make substantial compensation
nungsgesetz (TextilKennzG – German Textile Labelling Act),
56
which is based on an EC directive, textile products may only
It cannot be ruled out that the TOM TAILOR GROUP, as a manu
be commercially marketed, or offered for sale, imported
facturer of branded goods and in the course of its intended
or otherwise brought into Germany for delivery to the end
growth, will be exposed to the risk of product and brand coun
consumer, if they are furnished with information about the
terfeiting in the form of unauthorised imitations and repro
type and proportion by weight of the raw materials used,
ductions of TOM TAILOR products and illegal use by third par
in line with the requirements set out in the TextilKennzG.
ties of the TOM TAILOR GROUP’s emblems, names or logos
Infringement of the requirements of the TextilKennzG consti
by third parties. Product and brand counterfeiting relating to
tutes an administrative offence. Since the TOM TAILOR GROUP
TOM TAILOR GROUP products may result in significant loss
also sells its products to end consumers, it is also bound by
of revenue under certain circumstances and damage to the
a number of general consumer protection regulations when
TOM TAILOR GROUP’s brands, for example if consumers buy
marketing and distributing its products, in addition to product
cheap imitations of TOM TAILOR products and subsequently
liability. The TOM TAILOR GROUP is not aware of any complaints
connect the brands with low quality and unattractive mar
or significant notices to desist having been brought against
keting. At the same time, the measures required to counter
the TOM TAILOR GROUP due to infringements of consumer pro
product and brand counterfeiting can lead to increased costs.
tection legislation, and the probability of these occurring is
Product and brand counterfeiting can therefore have moder
only very low to low, with low to moderate potential losses.
ate negative effects on the net assets, financial position and
Although we assess the occurrence of this risk as very low
results of operations of the TOM TAILOR GROUP. However,
to low, we cannot completely rule out negative effects on the
the TOM TAILOR GROUP’s products have so far not been the
victims of imitations or counterfeiting on a large scale. The
TOM TAILOR GROUP. We classify this risk as low.
probability of occurrence of this risk is assessed as very low
and the losses as moderate. Although we assess the proba
Risks to Trademarks
bility of occurrence of this risk as very low, we cannot com
Since the TOM TAILOR GROUP continues to adapt trends de
veloped by competitors, it can be prevented from using, man
ufacturing and marketing certain designs and product ideas
We classify this risk as low.
by third-party rights and supplementary related rights. In the
event that any third-party rights were to be infringed, the
Integration Risks
TOM TAILOR GROUP might be liable for damages and could be
There are various risk aspects arising in relation to integra-
obliged to take goods already produced off the market or to
tion processes for the BONITA Group, which was acquired
purchase a license for the use of these rights. This could result
in financial year 2012. Key risk elements include the unexpect
in loss of revenue, reduced margins and obligations to pay
ed departure of key management personnel, incompatible IT
damages to wholesale customers. In order to counter this,
systems and incompatible corporate cultures. The TOM TAILOR
there is a strict process within the TOM TAILOR GROUP, includ
GROUP believes that the integration process was largely
ing several checks. As a result, this risk is assessed to have
completed towards the end of 2013. A possible integration risk
a low probability of occurrence and to entail moderate losses.
is assessed to be moderate with very low probability of oc
Although we assess the probability of occurrence of this risk
currence. Although we assess the occurrence of this risk as very
as low, we cannot completely rule out negative effects on the
low, we cannot completely rule out negative effects on the
TOM TAILOR GROUP. We classify this risk as medium.
TOM TAILOR GROUP. Overall, we classify this risk as low.
57
IT Risks
The availability and operability of modern IT systems are essen
tial for the management of business processes and effec-
O PP O R TUNIT Y
M ANA G E M ENT
tive cost control. In particular, the IT systems in the inventory
management/logistics area and especially the systems used
The TOM TAILOR GROUP’s corporate culture emphasises think
in the sale of the TOM TAILOR GROUP’s products via the Inter
ing and acting in an entrepreneurial way. Within the Group,
net (e-shop), as well as the related service providers, are of
employees are expected to take considerable personal respon
major importance to the TOM TAILOR GROUP. The failure of
sibility. All employees are therefore called on to continuously
these IT systems could result in the business processes being
search for and take advantage of opportunities, regardless of
impacted and higher costs being incurred. The TOM TAILOR
their individual areas and scope of responsibility. Group com
GROUP also manages a significant part of its processes using
panies are encouraged to identify opportunities on an oper
IT systems. Even though the IT systems are secured in multi
ating level that arise as part of operating activities or as a
ple ways, it is not possible to rule out data loss and loss of sales
result of improved market conditions, for example, and to real
in the event of damage caused by, for example, fire, power
ise them so as to exceed their earnings targets. TOM TAILOR
failures, system errors, hacker attacks, fraud or terrorism, which
Holding AG collates these opportunities. They are evaluated
might have an effect on the Group’s earnings. The TOM TAILOR
and measures to take advantage of them are developed.
GROUP will continue to make targeted investments in the
Additionally, TOM TAILOR’s Management Board is responsible
expansion and enhancement of its IT systems in the future in
for regularly discussing opportunities.
order to ensure and increase the continuous operability of its
systems and the effectiveness of its processes. The probability
The following describes the significant opportunities that
of this risk occurring is assessed as very low and the extent of
could have positive effects on the net assets, financial position
any losses is considered to be moderate. Although we assess
and results of operations of the TOM TAILOR GROUP. The order
the probability of occurrence of this risk as very low, we
in which the opportunities are presented within the five cate
cannot completely rule out negative effects on the net assets,
gories reflects the current assessment of the relative potential
of opportunities for the TOM TAILOR GROUP and hence pro
GROUP. We classify this risk as low.
vides an indication of the present significance of these oppor
tunities. Unless specified otherwise, the opportunities
mentioned relate to all of the TOM TAILOR GROUP’s segments.
The opportunities that are relevant to the TOM TAILOR GROUP
can be divided into five categories that correspond to the
risk categories: external, strategic, financial, operational and
Company-related opportunities.
E X TE RNA L OPP OR TUNITIES
The TOM TAILOR GROUP intends to further extend and multiply
its existing business model – selling fashionable casual wear
in the mid-range price segment – for the TOM TAILOR brands
(TOM TAILOR, TOM TAILOR Denim and TOM TAILOR POLO TEAM)
and BONITA on its domestic market of Germany and on the
core international markets. It also plans to expand its market
position in Eastern Europe. If economic growth in Germany
and/or the TOM TAILOR GROUP’s core markets exceeds expec
tations consistently, overall consumer demand and hence
also demand for TOM TAILOR GROUP products could rise more
strongly than predicted. In Central and Eastern Europe in par
ticular there is additional catch-up potential and opportunities
for per capita spending on clothing.
58
A continuing shift from bricks-and-mortar retailers to online
The management also makes use of opportunities that
retail can be seen within the clothing market. Germany is one
arise to secure existing financing for the long term and
of the forerunners when it comes to online shopping in the
to negotiate the underlying conditions to the benefit of the
clothing market. The expanded online offering for all of the
Group.
TOM TAILOR GROUP’s brands is directly influencing this change
in buying behaviour, intensifying contact with customers and
OPE R ATIONA L OPP OR TUNITIES
building brand loyalty. This could give rise to opportunities in
The TOM TAILOR GROUP has operated its own sourcing organ-
the form of increased revenue and income for the TOM TAILOR
isation for procurement in Asia since 2012. Starting in Febru
GROUP.
ary 2014, purchasing for the BONITA brand will be transferred
to this sourcing organisation. This opens up opportunities
Changes to laws and regulations, particularly in the inter-
to cut costs and to exploit synergies and economies of scale
national markets, could potentially have a positive impact on
thanks to greater purchasing volumes in the entire Group.
the chances of higher sales and hence on the profitability of
the TOM TAILOR GROUP. In particular, this includes reductions
With respect to sales, opportunities exist to find above-
in import duties or taxes, which would have a positive effect
average locations for the retail segment and that existing
on the TOM TAILOR GROUP’s growth potential.
stores also report above-average performance. This may
enable the Group both to reduce the depreciation period for
These external opportunities could therefore positively impact
its own stores and to minimise inventory risk and potential
the Group’s revenue and results, thus also exceeding short-
discounts. Corresponding opportunities exist in the wholesale
and medium-term forecasts.
segment in particular with regard to revenue growth in the
controlled spaces. To this extent, the existing opportunities in
STR ATEG IC O PP OR TUNITIES
both segments could have a positive effect on the Group’s
Identifying and implementing trends is a key success factor in
results.
the fashion business. The design and product manufacturing
process, as well as the TOM TAILOR GROUP’s proximity to cus
COMPAN Y-RE L ATED OPP OR TUNITIES
tomers in its own retail stores and online, offer opportuni-
In 2013, the integration of the BONITA Group focused on the
ties to use the feedback from consumers to rapidly identify
product manufacturing process (particularly shortening lead
and implement new trends. If the TOM TAILOR GROUP suc
times), restructuring purchasing, establishing a dedicated
ceeds in capturing and implementing trends faster than before,
online shop and expanding the distribution network by own
this could have a positive effect on the Group’s revenue and
outlet stores. The measures, which have already been imple
earnings position above and beyond the previous forecasts.
mented, will offer the opportunity in the future to make a
positive contribution to the Group’s revenue and earnings situ
The brand image and long-term positioning of the TOM TAILOR
ation more quickly. In addition, there are opportunities in
brands (TOM TAILOR, TOM TAILOR Denim and TOM TAILOR POLO
other areas to generate positive results by leveraging synergy
TEAM) and BONITA play an important role in the future success
effects. In particular, BONITA’s successful retail logistics or
of the TOM TAILOR GROUP. If the TOM TAILOR GROUP tops
ganisation (push-and-pull logistics) has been tested in select
its previous success in establishing the brands both in Ger
ed TOM TAILOR retail stores since March 2013 as part of a pilot
many and abroad for the long term and increasing customer
project. If the test proves successful, this logistics organi
demand, this could positively impact the Group’s revenue and
sation could contribute to increasing space productivity in all
earnings position.
TOM TAILOR brand retail stores (TOM TAILOR, TOM TAILOR
Denim and TOM TAILOR POLO TEAM).
FINAN CIA L OPP O R TUNITIES
The TOM TAILOR GROUP continually analyses and manages its
The members of the Company’s Management Board possess
own financial position and the situation on the financial mar
many years of in-depth experience in the industry and market
kets in order to identify and take advantage of related oppor
as well as extensive knowledge of the organisational structure
tunities. Favourable exchange rates or interest rate changes
and workflows within the TOM TAILOR GROUP. To promote
could have a positive effect on the Group’s results.
operational efficiency, the internal structure and workflows
59
for the TOM TAILOR GROUP brands have been broken down
into divisions with clear responsibilities for revenue and earn
ings. The TOM TAILOR GROUP promotes continuous profes
sional development measures, performance-oriented remu
neration and maintaining an attractive corporate culture in
O V E R A L L ASSESS M ENT
B Y T H E M ANA G E M ENT B O A R D
O F T H E G R O UP ’ S R ISK
AND O PP O R TUNIT Y P O SITI O N
order to increase employees’ and managers’ productivity and
commitment, and at the same time create closer ties with
Having determined the probability of occurrence and effects
the Company. Lower staff turnover would also lead to higher
of all the risks described above, these risks do not, either
productivity and reduce recruitment expenditure. If these
individually or in the aggregate, currently represent a threat
effects on employee motivation have a stronger influence than
to the TOM TAILOR GROUP’s continued existence within a
currently expected, this could have a positive impact on the
reasonable period of time. Overall, there were no significant
Group’s results of operations.
changes with regard to the Group’s risk position compared
to the end of financial year 2012. With regard to the impact on
The TOM TAILOR GROUP’s human resources and technical
the BONITA subgroup’s earnings, which was addressed in re
equipment, as well as the organisation of its logistics, procure
lation to sales and inventory risk, the Company’s management
ment and distribution functions have created an infrastruc
expects that the situation will improve significantly in 2014,
ture that increases the opportunities for achieving the planned
and that the TOM TAILOR GROUP’s increasing earnings power
further growth and increased revenue without a correspond
will form a solid basis for future business development and
ing rise in staff, administrative and product organisation costs.
will furnish the resources necessary to pursue the opportun-
Additional economies of scale could reduce unit costs for de
ities available to the Group. The Company’s management is
velopment, manufacturing and samples in the case of further
confident that it will successfully counter the challenges aris
growth due to the increased number of units.
ing from the above-mentioned risks in 2014 as well.
Report on Post-Balance-Sheet Date Events
60
R e p or t o n
Po s t- B a l a n c e - Sh e e t D at e
Ev e n t s
In the period up to 24 February 2014, there were no significant operational and structural changes or transactions
within the TOM TAILOR GROUP that materially altered the net
assets, financial position and results of operations as against
31 December 2013.
Report on Expected Developments
61
R e p or t o n Ex p e c t e d
D e v e lo p m e n t s
S t r at e g i c O u t loo k
Central and Eastern Europe (+2.8%), which are increasingly
important for the TOM TAILOR GROUP, and Russia (+2.0%)
are also expected to develop positively in 2014. Solid growth
The TOM TAILOR GROUP’s strategy is to develop attractive
rates are expected to continue in Poland, Serbia and
fashion brands and bring these fashion brands to a broad
Slovakia.
group of buyers. The Group significantly expanded its pres
ence in August 2012 when it acquired BONITA and had
Consumer sentiment in Germany improved year-on-year.
1,364 retail stores at the end of 2013. Going forward, too,
The GfK consumer confidence index rose in 2013, closing at
the TOM TAILOR GROUP intends to use its business model
7.4 points (end of 2012: 5.6 points). Consumers believe the
to continuously progress its growth path in Germany and in
German economy is picking up speed again. As in the past
its core international markets of Austria, Switzerland, the
financial year, the domestic economy should be the primary
Benelux countries and France.
source of momentum. The recovery being recorded in a
number of eurozone countries should also have a positive
effect on exports.
P O SITI V E G L O B A L
E C O N O M I C DE V E L O P M ENT
E X PE C TED
The consumer price index recorded a further year-on-year
decline in 2013 to 1.5% (previous year: 2.0%). Inflation in the
eurozone was also down significantly to 0.9% (2012: 2.2%).
For 2014, the ECB is forecasting that consumer prices will rise
by 1.1%.
The International Monetary Fund (IMF) largely confirmed its
autumn 2013 growth forecast in January 2014. Global eco
For the textile and clothing industry, raw cotton prices are the
nomic output is expected to improve in 2014 (+3.7 %) and 2015
crucial factor. The trend will primarily depend on the extent to
(+3.9%), based on the stronger second half of 2013. The main
which the Chinese government decides to subsidise domestic
reason for this is likely to be the continuing recovery of the in
cotton production in 2014. If China raises cotton export levels,
dustrialised nations, where GDP is expected to increase by
cotton prices are expected to fall. The anticipated decline
2.2 % in 2014 (2013: 1.3%). The highest growth momentum
in production in the United States would have the opposite
worldwide will probably be in China (+7.5%) and in India (+5.4%).
effect. Overall, the experts are expecting prices to be down
According to the experts, the eurozone is set to see growth
on 2013 and are forecasting a range of between 76 and 82 US
for the first time since 2011; the IMF is expecting economic
cents per pound. (Source: Cotton forward curve, NYB-ICE Futures US Softs)
output there to increase by 1.0 % (2013: – 0.4%). Following the
recession in recent years, GDP in Italy (+0.6%) and Spain (+0.6%)
With respect to production costs, however, the textile
should also pick up again. GDP in Germany is forecast to in
industry must be prepared for permanent cost increases in
crease by 1.6%. The IMF is also expecting to see a positive eco
Asia, due to further increases in labour costs.
nomic trend in the TOM TAILOR GROUP’s core markets; in ad
dition to Germany, these are Austria, Switzerland, the Benelux
Since August 2012, merchandise purchased from Asia has been
countries and France. It is anticipating a 1.4% increase for the
sourced directly via TOM TAILOR’s own central purchasing
eurozone economy in 2015.
company in Asia, the Hong Kong-based TOM TAILOR Sourcing
62
Ltd. Having its own company on the ground allows the
ing like-for-like growth and positive gross margin develop
TOM TAILOR GROUP to be closer to suppliers and secures the
ment in the BONITA segment. In the case of the TOM TAILOR
required production capacity in the long term as well as
brands, which are divided into the TOM TAILOR wholesale
ensuring that cotton is procured and processed in a timely
and TOM TAILOR retail segments, the goal is to continue the
manner. As from the beginning of 2014, TOM TAILOR Sourcing
existing positive trend.
Ltd. is expected to also assume procurement for BONITA
in Asia to a large extent, hence delivering cost benefits for
Expa n sion plus focus on profita bilit y
BONITA and further economies of scale for the Group.
The TOM TAILOR GROUP will continue its growth path in 2014
Due to the expected synergies after the integration of BONITA
with a focus on increasing its profitability.
is complete and the stable development in the Group’s core
markets, the TOM TAILOR GROUP sees itself in a strong position
The ongoing expansion of the controlled selling spaces will take
to continue its profitable growth and sustainably increase its
place primarily in the retail segments, with new TOM TAILOR
enterprise value.
and BONITA brand stores being opened in particular. With the
new stores, the Company will place even more importance
on profitability, which means that no flagship stores will be
Ex p e c t e d
B u s i n e s s D e v e lo p m e n t s
opened in 2014 – while these stores have an extremely posi
tive effect on brand image, their exclusivity and size can also
lead to low or even negative profitability. In addition, unprof
itable branches will be closed where economically sensible.
The TOM TAILOR GROUP is planning to open around 100 new
Pe rform a nce of the TOM TAILOR
a nd BONITA B r a nds
stores in 2014. The BONITA brand’s new online shop went live
The TOM TAILOR GROUP has two strong brands, TOM TAILOR
around EUR 1.2 million. This online shop is to be expanded go
and BONITA, which are aimed at complementary target age
ing forward as the group sees high revenue potential from the
groups, and which therefore cover the entire fashion market
growing over-40 target group on the one hand and as online
on 6 June 2013, recording a successful launch with revenue of
in the area of casual wear. The two brands each have their
retail is expected to become increasingly important in the tex
own brand profile and a strictly separate market presence.
tile industry on the other. In addition, a customer card was
TOM TAILOR comprises the TOM TAILOR, TOM TAILOR Denim
introduced at BONITA – and nearly 390,000 had been issued by
and TOM TAILOR POLO TEAM brands. At the end of 2013, the
the end of the year. The aim here is to further increase the
Company revamped the TOM TAILOR brand profile, realigning
number of cardholders. We are expecting to see revenue from
it to underscore its international image. The collections
the TOM TAILOR online shop to continue to climb, in addition
designed in line with the new profile will be available from
to the BONITA online shop.
August 2014. The BONITA brand comprises the BONITA
and BONITA men lines. The TOM TAILOR GROUP is planning to
The TOM TAILOR GROUP is also planning further growth in the
strengthen the brand in the first half of 2014 by continuing
wholesale segment for 2014 and to increase the number
to modernise the BONITA branches and by optimising the col
of shop-in-shops by around 200 and the number of franchise
lections using TOM TAILOR’s proven design and development
stores by around 15. In particular, the objective is to expand
process.
business activities with existing wholesale partners.
In addition, it is transferring the production of the BONITA col
Overall, the aim is to expand the TOM TAILOR GROUP mainly in
lections to Asia and driving forward its moves to bundle
Germany and in the core international markets. Experts are
the Group-wide purchasing activities in Asia at its TOM TAILOR
continuing to forecast stable consumer spending and rising
Sourcing Ltd. purchasing company. The resulting synergy
growth for these markets.
effects should both improve the gross margin and directly
contribute to product improvements.
The TOM TAILOR GROUP is planning to invest around
EUR 30 million in financial year 2014 to expand and
After BONITA’s integration process was largely completed
modernise the controlled selling spaces and the necessary
at the end of 2013, the Company will focus in 2014 on restor
infrastructure.
63
Ex p e c t e d D e v e lo p m e n t
of t h e G ro u p ’ s Po s i t i o n
enue and an improved gross margin. The Management Board
is expecting profitability to rise by more than average in the
BONITA segment in 2014. No material changes are expected
in the key factors affecting the gross margin, such as trends in
Ta rg e t Re v e n ue of ov e r
EU R 950 Million
cotton prices and exchange rates (EUR/USD), compared with
From today’s perspective, the Management Board of
non-recurring items/special factors to impact the EBITDA
TOM TAILOR Holding AG is aiming for Group revenue of more
margin as was the case in particular with the integration costs
than EUR950 million in financial year 2014. The Company
incurred in 2013. The expected growth will lead to a com
is expecting the TOM TAILOR wholesale and TOM TAILOR retail
mensurate increase in non-staff operating expenses, as well
segments to be the main drivers of the revenue increase.
as in particular in personnel expenses, rental expenses and
Due to the strategic focus on the retail segment, revenue is
logistics costs.
2013. In addition, the Management Board is not anticipating any
anticipated to grow faster in that segment than in the whole
sale segment, which means that the share of total revenue
With respect to the change in the EBITDA margin in financial
accounted for by the retail business should increase. In addition
year 2013 and the deviation between target and actual figures
to the planned revenue growth from the expansion of con
for this, please see the disclosures in the section entitled
trolled selling spaces (primarily own stores), the revenue fore
“Overall Assessment by the Management Board of Net Assets,
cast is also based on the assumption that the slightly posi-
Financial Position and Results of Operations”.
tive economic development being predicted by experts for
2014, in particular in the eurozone, will actually occur and
that there will not be an economic slowdown.
Fu r the r Re duc tion in Ne t De bt a nd
Incre a s e in Equ it y R ati o
Based on the planned increase in revenue and the improved
Recurring EBITDA Marg in of Around 10%
EBITDA margin, the TOM TAILOR GROUP is expecting a
The TOM TAILOR GROUP is planning to steadily increase its
positive effect on operating cash flow in 2014. Taking into
profitability in financial year 2014. The Management Board of
account the planned investments of around EUR 30 million,
TOM TAILOR Holding AG is aiming for a recurring EBITDA mar
the TOM TAILOR GROUP is anticipating a low double-digit
gin of roughly 10%. The increase in profitability is expected to
million euro reduction in net debt for 2014. The TOM TAILOR
come from the higher share of the Group’s total revenue to
GROUP is planning to reach its long-term goal of an equity
be generated by the retail business, the planned increase in rev-
ratio of 30% in 2014.
64
O v e r a ll A s s e s s m e n t
of Ex p e c t e d
D e v e lo p m e n t s by t h e
Management Board
synergy effects as well as by optimising inventory and
pricing policies. In addition, the process of transferring
purchasing to Asia and bundling the Group-wide purchasing
volume in its own purchasing organisation will continue
–Continued expansion with a focus on the retail segment
–Further expansion of direct sourcing in Asia for TOM TAILOR
The Management Board of TOM TAILOR Holding AG continues
to assess the Group’s position as positive despite the fact
and BONITA
–An increase in selling space productivity
that financial year 2013 did not meet expectations. It views
the negative earnings trend in the BONITA segment and
The forecast for 2014 takes into account all currently known
the challenging weather conditions in financial year 2013 as
events that could influence business developments at the
being temporary factors, since the TOM TAILOR wholesale
TOM TAILOR GROUP. However, actual business performance
and TOM TAILOR retail segments in particular performed ex
could differ from the forecasts due to political and eco-
tremely well in 2013. In addition, the measures necessary
nomic developments or the impact of the weather – factors
to stabilise and increase profitability in the BONITA segment
that the Group cannot predict or influence in any way.
in future were initiated and implemented as part of the
integration process, which was largely completed at the end
of 2013. The Management Board is anticipating to increase
Hamburg, 24 February 2014
TOM TAILOR’s profitability on the one hand, while also putting
BONITA on track for profitable growth. Overall, the Manage
ment Board therefore expects the net assets, financial posi
tion and results of operations to develop positively in financial
Dieter HolzerDr Axel Rebien
year 2014.
Chief Executive Officer The following aspects play a key role in increasing profitability:
Udo Greiser Dr Marc Schumacher
–A significant improvement in the BONITA segment’s gross
margin, to be achieved by realising economies of scale and
Chief Product Development and Procurement Officer
Chief Financial Officer
Chief Retail Officer
C o n s o l i d at e d
F i n a n c i a l S tat e m e n t s
current
liabilities
Equity
29.2%
2 7. 2 %
non-current
liabilities
43.6%
C a p i ta l S t r u c t u r e a s o f 3 1 d e c e m b e r 2 0 1 3
67
68
Con solidate d Income S tate me nt
Con solidate d S tate me nt
of Compre he n si v e Income
69
Con solidate d S tate me nt of C a s h Flows
70
Con solidate d Ba l a nce S he e t
72
Con solidate d S tate me nt of Ch a ng e s
in Equ it y
74N ote s to the Con solidate d
Fin a n ci a l S tate me nt s
75 General Information
82
Accounting Policies and Consolidation Methods
88 Income Statement Disclosures
92
Balance Sheet Disclosures
109
Management of Financial Risk and Financial Derivatives
117
Cash Flow Disclosures
118
Segment Reporting
119
Other Disclosures and Explanations
C o n s o l i d a t e d F i n a n c i a l St a t e m e n t s
67
I n c o m e S tat e m e n t
For the Financial Year from 1 January to 31 December 2013
Note
2013
2012
Revenue
(1)
907,249
629,697
Other operating income
(2)
27,432
29,423
Cost of materials
(3)
–408,265
–296,546
Personnel expenses
(4)
–193,504
–121,501
Depreciation, amortisation and impairments
(5)
–57,674
–38,791
Other operating expenses
(6)
–268,781
–186,063
EUR thousand
Profit from operating activities
Financial result
(7)
Result before income taxes
6,457
16,219
–18,301
–15,783
–11,844
436
–4,397
2,670
–16,241
3,106
–21,255
288
5,014
2,818
Basic earnings per share (in EUR)
–0.87
0.01
Diluted earnings per share (in EUR)
–0.87
0.01
Income taxes
(8)
thereof:
Shareholders of TOM TAILOR Holding AG
Non-controlling interests
Earnings per share
(9)
Consolidated Statement of Comprehensive Income
68
C o n s o l i d at e d S tat e m e n t
of Comprehensive Income
Consolidated Statement of Comprehensive Income
For the Financial Year from 1 January to 31 December
EUR thousand
Exchange differences on translating foreign operations
Change in fair value of cash flow hedges
Deferred taxes on change in fair value of cash flow hedges
Items that may be reclassified subsequently to profit or loss
Other comprehensive income
Total comprehensive income, net of tax
thereof:
2013
2012
–16,241
3,106
–230
–903
–3,323
–9,249
1,041
2,775
–2,512
–7,377
–2,512
–7,377
–18,753
–4,271
–23,643
–6,926
4,890
2,655
69
S tat e m e n t o f C a s h F l o w s
EUR thousand
2013
2012
–16,241
3,106
57,674
38,791
4,397
–2,670
Interest income/expense
18,301
15,783
Change in non-current provisions
–2,681
10,193
Change in current provisions
–1,905
–6,837
Depreciation, amortisation and impairment losses
Income taxes
Proceeds from disposal of intangible assets and items of property, plant and equipment
Change in inventories
Change in receivables and other assets
704
727
–13,695
–32,110
441
–2,875
16,556
31,848
–635
–14,154
Other non-cash changes
–3,209
–21,432
Cash generated from/used in operations
59,707
20,370
–12,937
–14,667
Change in liabilities
Income taxes paid/refunded
Interest paid
Interest received
Net cash provided by/used in operating activities
Payments to acquire intangible assets and items of property, plant and equipment
Additions due to change in basis of consolidation
Payments from disposal of intangible assets and items of property, plant and equipment
Net cash provided by/used in investing activities
Cash capital increase by issuing new shares
80
30
46,850
5,733
–26,914
–35,638
–61
–116,049
972
2,908
–26,003
–148,779
29,544
20,660
–913
–843
–
–2,810
–2,643
–
Change in non-controlling interests
–
–
Change in foreign currency reserve/cash flow hedges
–
–
Change in current financial liabilities
–
–
Proceeds from financial liabilities
80,000
237,500
Repayments of financial liabilities
–133,034
–67,462
–27,046
187,045
Costs of raising equity capital
Dividend payment
Dividend payment to non-controlling interest shareholders
Net cash provided by/used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net change in cash and cash equivalents
–54
7
–6,253
44,006
Cash and cash equivalents at beginning of period
53,382
9,376
Cash and cash equivalents at end of period
47,129
53,382
47,129
53,382
Composition of cash and cash equivalents
Cash funds
70
Bal ance Sheet
As at 31 December 2013
Note
31.12.2013
31.12.2012
Intangible assets
(10)
337,276
352,765
Property, plant and equipment
(11)
159,633
163,500
Other assets
(13)
10,434
8,369
507,343
524,634
EUR thousand
Assets
Non-current assets
Current assets
Inventories
(14)
137,809
123,737
Trade receivables
(15)
47,945
51,917
1,851
2,242
15,276
Income tax receivables
Other assets
(13)
17,526
(16)
47,129
53,382
252,260
246,554
759,603
771,188
Total assets
71
Note
31.12.2013
31.12.2012
Subscribed capital
(17)
26,027
24,209
Capital reserves
(17)
298,378
274,486
Consolidated net accumulated losses
(17)
–101,600
–80,345
EUR thousand
Liabilities and Shareholders’ Equity
Shareholders’ equity
Accumulated other comprehensive income
–7,452
–5,064
215,353
213,286
6,377
5,680
221,730
218,966
Non-current liabilities
Provisions for pensions
(20)
619
511
Other provisions
(21)
10,773
11,845
Deferred tax liabilities
(22)
76,671
78,635
Non-current financial liabilities
(23)
239,146
204,579
Other non-current liabilities
(25)
4,342
5,000
331,551
300,570
29,165
29,616
Current liabilities
Other provisions
(21)
Income tax payables
9,737
5,641
Current financial liabilities
(23)
26,478
96,615
Trade payables
(24)
111,820
93,302
Other current liabilities
(25)
29,122
26,478
206,322
251,652
759,603
771,188
Total equity and liabilities
72
C o n s o l i d at e d S tat e m e n t
of Changes in Equity
EUR thousand, if not stated otherwise
Number of shares
[thousands]
Subscribed
capital
Capital
reserves
274,486
24,209
24,209
Change in basis of consolidation
–
–
–
Acquisition of non-controlling interests without change of control
–
–
–3,450
Balance at 1 January 2013
–
–
–
1,818
1,818
27,726
Non-cash capital increase
–
–
–
–
–
–634
Dividends paid
–
–
–
Withdrawal from capital reserves
–
–
–
Other changes
–
–
250
26,027
26,027
298,378
Number of shares
[thousands]
Subscribed
capital
Capital
reserves
16,528
16,528
187,856
–
–
–
Comprehensive income, net of tax
Cash capital increase
Balance at 31 December 2013
EUR thousand, if not stated otherwise
–
–
–
Cash capital increase
1,653
1,653
19,007
Non-cash capital increase
Comprehensive income, net of tax
6,028
6,028
86,201
–
–
–590
Dividends paid
–
–
–
–
–
–17,970
Other changes
–
–
–18
24,209
24,209
274,486
73
Deferred taxes on
fair value measurement of hedges
Attributable to
shareholders
of TOM TAILOR
Holding AG
Non-controlling
interests
Total
213,286
5,680
218,966
Consolidated net
accumulated losses
Currency translation
differences
Cash flow
hedge reserve
(IAS 39)
–80,345
–1,556
–4,895
1,387
–
–
–
–
–
–
–
–
–
–
–
–3,450
–1,550
–5,000
–21,255
–106
–3,323
1,041
–23,643
4,890
–18,753
–
–
–
–
29,544
–
29,544
–
–
–
–
–
–
–
–
–
–
–
–634
–
–634
–
–
–
–
–
–2,643
–2,643
–
–
–
–
–
–
–
–
–
–
–
250
–
250
–101,600
–1,662
–8,218
2,428
215,353
6,377
221,730
Attributable to
shareholders
of TOM TAILOR
Holding AG
Non-controlling
interests
Total
Consolidated net
accumulated losses
Currency translation
differences
Cash flow
hedge reserve
(IAS 39)
Deferred taxes on
fair value measurement of hedges
–95,793
–816
4,354
–1,388
110,741
3,001
113,742
–
–
–
–
–
24
24
288
–740
–9,249
2,775
–6,926
2,655
–4,271
–
–
–
–
20,660
–
20,660
–
–
–
–
92,229
–
92,229
–
–
–
–
–590
–
–590
–2,810
–
–
–
–2,810
–
–2,810
17,970
–
–
–
–
–
–
–
–
–
–
–18
–
–18
–80,345
–1,556
–4,895
1,387
213,286
5,680
218,966
N o t e s t o t h e C o n s o l i d at e d
F i n a nc i a l S tat e m e n t s
75
G E NE R AL INFORMATION
92
BALA NCE SHEET DISCLOSU RES
75
Basis of Preparation
92
(10) Intangible Assets
79
Basis of Consolidation
96
(11) Property, Plant and Equipment
81 Group Reporting Date and Group Financial Year
98
(12) Investment Securities
99
(13) Other Current Assets
99
(14) Inventories
99
(15) Trade Receivables
100
(16) Cash and Cash Equivalents
100
(17) Equity
101 (18) Stock Option Programme
102
(19) Dividend per Share
102
(20) Provisions for Pensions
104
(21) Other Provisions/Contingent Liabilities
106
(22) Deferred Tax Liabilities
1 07 (23) Financial Liabilities
108
(24) Trade Payables
108
(25) Other Liabilities
82ACCOU NTING P OLICIES A ND
CON SOLIDATION METHODS
82
General Principles
82
Consolidation Methods
82
Currency Translation
82
Recognition of Income and Expenses
83
Business Combinations
83 Goodwill
83
Other Intangible Assets
83
Property, Plant and Equipment
84
Impairment of Assets
84
Finance Leases
84
Investment Securities
84
Financial Instruments
85
Deferred Taxes
109MA N AG EME NT OF FIN A NCIAL R IS K
A N D FIN A NCIAL DE R I VATI V ES
86
Receivables and Other Assets
109
Capital Management
86
Inventories
109
Use and Management of Financial Instruments
86
Cash Funds
1 10
Fair Values of Financial Instruments
86
Costs of Raising Equity Capital
113
Market Risk
86
Dividend Distribution
86
Employee Benefits
117 C ASH FLOW DISCLOSU RES
118
SEG ME NT RE P OR TING
86
Share-Based Payment
87 Other Provisions
87
Financial and Other Liabilities
87
Significant Judgements, Estimates and Assumptions
87
Borrowing Costs
87
Events After the End of the Reporting Period
119
OTHER DISCLOSURES AND EXPLANATIONS
119
Research and Development
119
Contingent Liabilities and Other Financial Obligations
119
Supplementary Disclosures on Rental Agreements
and Leases
88INCOME STATEME NT DIS CLOSU RES
88 (1) Revenue
120
Borrowing Costs
120
Related Party Disclosures
88
(2) Other Operating Income
124
Disclosures on Shareholdings
88
(3) Cost of Materials
in Tom Tailor Holding Ag
88
(4) Personnel Expenses
127
Declaration of Compliance with the German
89
(5) Depreciation, Amortisation and Impairment Losses
Corporate Governance Code
89
(6) Other Operating Expenses
127
Fees of the Auditors
89
(7) Financial Result
127
Events After the End of the Reporting Period
90
(8) Income Taxes
128
Exempting Consolidated Financial Statements
91 (9) Earnings per Share
128
Publication of the Consolidated Financial Statements
75
G E N E R AL
I N F O R MATIO N
Changes Applicable in 2013
The TOM TAILOR GROUP applied the following new
or amended standards and interpretations in financial
year 2013:
The TOM TAILOR GROUP is a vertically integrated fashion and
lifestyle company that offers casual wear in the mid-range
price segment. The TOM TAILOR brand comprises the
TOM TAILOR brand with collections from the TOM TAILOR
New Regulations and Amendments
in Financial Reporting
Effective date
Date of EU
endorsements
IFRS 13
Fair Value Measurement
1/1/2013
29/12/2012
IAS 19
Employee Benefits (revised 2011)
1/1/2013
6/6/2012
Amendment to IAS 1
Presentation of Financial Statements – Presentation of Items
of Other Comprehensive Income
1/7/2012
6/6/2012
Amendment to IAS 12
Income Taxes: Deferred Tax – Recovery of Underlying Assets
1/1/2013
29/12/2012
Amendment to IFRS 7
Financial Instruments:
Disclosures – Offsetting Financial
Assets and Financial Liabilities
1/1/2013
29/12/2012
IASB Annual Improvements Project
2009–2011
1/1/2013
28/3/2013
MEN, WOMEN, KIDS, MINIS and BABY product lines, the
TOM TAILOR Denim brand with the Denim Male and Denim
Female product lines, and the TOM TAILOR POLO TEAM
brand. The BONITA brand comprises the BONITA and BONITA
men lines, which have their own profile and are aimed at the
over-40 target group. This product portfolio is complemented
by a wide range of fashionable accessories.
The ultimate parent of the TOM TAILOR GROUP is TOM TAILOR
Holding AG, which is domiciled in Hamburg, Germany, and
entered in the commercial register of Hamburg Local Court
under the number HRB 103641. Its registered office is at
Garstedter Weg 14, 22453 Hamburg.
BASIS OF PRE PA R ATION
The consolidated financial statements of TOM TAILOR Holding
AG (“the consolidated financial statements”) were prepared in
accordance with the International Financial Reporting Standards (IFRSs) effective as at the reporting date, as adopted
by the EU. The applicable interpretations issued by the Inter
New standards/interpretations
Amendments to standards
national Financial Reporting Interpretations Committee (IFRIC)
for financial year 2013 were also applied.
IFRS 13 Fair Value Measurement
The IASB issued the new standard IFRS 13 Fair Value Measure-
The consolidated income statement was prepared using the
ment in May 2011. IFRS 13 defines fair value and provides
nature of expense method. The consolidated balance sheet,
guidance on how to determine fair value when fair value meas-
the consolidated income statement and the consolidated
urement is required by another IFRS. The standard itself does
statement of comprehensive income are presented in accord-
not specify the cases in which fair value measurement must
ance with the classification requirements of IAS 1 Presenta-
be applied. With the exception of the explicit scope exclusions
tion of Financial Statements.
in IFRS 13, it sets out consistent disclosures for all assets and
liabilities that are measured at fair value, as well as for all assets
The consolidated financial statements were prepared in euros.
and liabilities whose fair value must be disclosed; in particu-
All amounts are shown in thousands of euros (EUR thousand)
lar, this enhances the disclosure requirements relating to non-
unless otherwise stated. Discrepancies may arise from the
financial assets.
addition of these amounts due to rounding. The consolidated
financial statements were prepared using the historical cost
IAS 19 Employee Benefits
convention. Exceptions to this rule relate to certain financial
In June 2011, the IASB issued amendments to IAS 19 Employee
instruments, which are measured at fair value.
Benefits. The amendments mainly concern eliminating the
deferral of actuarial gains and losses (the “corridor” approach)
With the following exceptions, the accounting policies applied
in favour of immediate recognition in other comprehensive
correspond in general to those applied in the previous year.
income, immediate recognition of past service cost, the pres-
76
entation of changes in net liabilities/assets under defined
The amended standards require the disclosure of more exten-
benefit pension plans, and the recognition of the net inter-
sive information than is currently required; in particular,
est expenses or income from a pension plan’s net liabilities or
the scope of the quantitative information has been expanded.
net assets. In addition, supplementary disclosures on the
In addition to financial instruments that are offset in the
characteristics of the pension plans and the associated risks
balance sheet in accordance with IAS 32, the new disclosure
for the entity are required.
requirements apply to financial instruments that are merely
the subject of netting agreements, irrespective of whether
Amendment to IAS 1 Presentation of Financial State
they are actually offset in the balance sheet.
ments – Presentation of Items of Other Comprehensive
Income
Annual Improvements (AIP) 2009–2011
In June 2011, the IASB issued amendments to IAS 1 Presenta-
In June 2011, the IASB issued its fourth round of annual im-
tion of Financial Statements under the title Presentation
provements as an exposure draft of proposed amendments
of Items of Other Comprehensive Income. The amendments
to five IFRSs. The amendments are intended to eliminate ambi-
require items of other comprehensive income (OCI) to be
guities in existing IFRSs. The following areas have been clar
grouped into those that will be reclassified subsequently to
ified: requirements regarding voluntary comparative informa-
profit or loss (“recycled”) and those that will not.
tion (IAS 1), classification of servicing equipment as inventory
Amendment to IAS 12 – Deferred Tax: Recovery of
cations of distributions to holders of an equity instrument
Underlying Assets
and transaction costs of an equity transaction (IAS 32 and
The measurement of deferred tax liabilities and deferred tax
IAS 12), disclosure of segment information in an interim report
assets depends on whether the carrying amount of an
(IAS 34).
or as property, plant and equipment (IAS 16), income tax impli-
asset is expected to be recovered through use or through sale.
The amendment to IAS 12 introduces a mandatory exemption
Other than the additional disclosures, the new accounting
for investment property. This exemption also applies to
requirements do not affect or have no material effect on the
investment property acquired in a business combination that
presentation of the Group’s net assets, financial position and
is subsequently measured at fair value.
results of operations.
Amendment to IAS 32 – Offsetting Financial Assets and
Standards, Interpretations and Amendments to
Financial Liabilities and IFRS 7 Financial Instruments:
Published Standards Approved by the IASB,
Disclosures – Offsetting Financial Assets and Financial
But Not Yet Adopted by the EU as at 31 December 2013
Liabilities
In financial year 2013, the TOM TAILOR GROUP did not apply
The IASB has issued an amendment to the application guidance
the following new or amended accounting standards that
contained in IAS 32 Financial Instruments: Presentation to
have already been approved by the IASB, as they were not yet
clarify certain requirements regarding the offsetting of finan-
required to be applied:
cial assets and financial liabilities in the balance sheet. The
amendments leave the current offsetting model under IAS 32
in principle unchanged.
77
The expected effective date is the beginning of the TOM TAILOR
Future New Regulations and Amendments
in Financial Reporting
Effective date
Holding AG financial year in which the new accounting standard
Date of EU
endorsements
IFRS 10 Consolidated Financial Statements
New standards/interpretations
IFRS 10 introduces a single definition of control for all entities,
IFRS 10
Consolidated Financial Statements
1/1/2014
29/12/2012
IFRS 11
Joint Arrangements
1/1/2014
29/12/2012
IFRS 12
Disclosure of Interests
in Other Entities
1/1/2014
29/12/2012
IAS 27
Separate Financial Statements
(revised 2011)
1/1/2014
29/12/2012
IAS 28
Investments in Associates and
Joint Ventures (revised 2011)
1/1/2014
29/12/2012
Outstanding
Outstanding
1/1/2014
Q2/2014
IFRS 9
Financial Instruments
IFRIC 21
Levies
must be applied for the first time.
creating a standardised basis for determining whether a parent-subsidiary relationship exists and the associated inclusion
in the basis of consolidation. The standard provides comprehensive application guidance on determining whether a control relationship exists. The new standard fully replaces IAS 27
Consolidated and Separate Financial Statements and SIC-12
Consolidation – Special Purpose Entities.
As part of the initial application of IFRS 10 Consolidated Financial Statements, the Group reassessed the control relationships in respect of its equity interest in TT OFF SALE (NI) LTD.
and its subsidiary TT OFF SALE (Ireland) LTD., which was pre
viously accounted for using the equity method. Based on the
current circumstances and control relationships, the Management Board determined that the Group controls the company
and its subsidiary. The two companies are therefore required
Amendments to standards
Amendment to IFRS 10, IFRS 11,
IFRS 12
Consolidated Financial Statements,
Joint Arrangements,
Disclosure of Interests in Other
Entities – Transition Guidance
to be consolidated. The impact of the investees’ previous
1/1/2013
5/4/2013
earnings situation on the consolidated financial statements
was largely offset by consolidation effects, particularly
impairment losses on trade receivables from the investees.
As a result, there was no material effect on earnings in the
Amendment to IAS 32
Financial Instruments: Presen
tation – Offsetting Financial Assets
and Financial Liabilities
1/1/2014
29/12/2012
Amendment to IFRS 10, IFRS 12,
IAS 27
Separate Financial Statements – Exemption from Consolidation for
Investment Entities
1/1/2014
20/11/2013
Amendment to IAS 36
Impairment of Assets – Recoverable Amount Disclosures for NonFinancial Assets
1/1/2014
Amendment to IAS 39
Novation of Derivatives
1/1/2014
19/12/2013
Amendment to IAS 19
Defined Benefit Plans – Employee
Contributions
1/7/2014
Q4/2014
2010–2012
1/7/2014
Q4/2014
entities must meet; these include interests in subsidiaries,
2011–2013
1/7/2014
Q4/2014
entities. The new standard replaces the existing disclosure
consolidated financial statements.
IFRS 11 Joint Arrangements
IFRS 11 applies to circumstances where an entity jointly
controls a joint venture or a joint operation. In future, joint
ventures must be accounted for using the equity method.
The former alternative of proportionate consolidation is no
19/12/2013
longer permitted. The new standard replaces IAS 31 Interests in Joint Ventures and SIC-13 Jointly Controlled Entities – Non-monetary Contributions by Venturers.
IFRS 12 Disclosures of Interests in Other Entities
IFRS 12 combines in a single standard all of the disclosure
requirements that an entity with shares or an interest in other
associates, joint arrangements and unconsolidated structured
requirements in IAS 27, IAS 28, IAS 31 and SIC-12.
78
Amendment to IAS 27 Consolidated and Separate
cial assets and financial liabilities in the balance sheet.
Financial Statements
The amendments leave the current offsetting model under
Following the issuance of the new IFRS 10, the amended
IAS 32 in principle unchanged.
IAS 27 now only includes requirements applicable to separate
financial statements prepared in accordance with IFRSs.
Amendment to IFRS 10, IFRS 12 and
IFRS 27 Investment Entities
Amendment to IAS 28 Investments in Associates
To be considered as an investment entity, a company must
The amended IAS 28 specifies how to account for investments
satisfy three criteria and possess four further typical charac-
in associates and how to apply the equity method when
teristics. An investment entity does not consolidate its sub-
accounting for investments in associates and joint ventures.
sidiaries, unless the subsidiary solely provides services related
IFRS 9 Financial Instruments
to account for their subsidiaries at fair value through profit
IFRS 9 will eventually completely replace IAS 39 Financial
or loss in accordance with IFRS 9 (and IAS 39). A parent of
Instruments: Recognition and Measurement. In a first step,
an investment entity, which does not itself meet the criteria
IFRS 9 Financial Instruments – Classification and Measure-
to be classified as an investment entity, is still required
ment of Financial Assets was issued in November 2009. Under
to consolidate the investment entity and its subsidiaries. The
IFRS 9, financial assets are either measured at amortised cost
fair value measurement applied by the subsidiary cannot
or at fair value. Classification in one of the two measurement
be retained.
to investment activities. Investment entities are required
categories is based on how an entity manages its financial
instruments and on the contractual cash flow characteristics
Amendment to IAS 36 Impairment of Assets – Recover
of the financial assets. The standard was supplemented by
able Amount Disclosures for Non-Financial Assets
requirements on accounting for financial liabilities and the de
The amendments issued by the IASB provide for minor adjust-
recognition of financial assets and liabilities issued in October
ments to IAS 36 Impairment of Assets. The amendments
2010. The issued version of IFRS 9 no longer includes an effec-
rectify the requirement to disclose the recoverable amount of
tive date, as certain phases of the project are still awaiting
each cash-generating unit to which a significant amount
completion. In November 2013, the IASB tentatively decided
of goodwill or indefinite-lived intangible assets have been allo-
that the mandatory effective date of IFRS 9 would be no
cated, which was introduced to IAS 36 by IFRS 13 Fair Value
earlier than 1 January 2017.
Measurement. The IASB’s intention was to require such dis
closures only for cash-generating units for which an impair-
Due to the postponement of the effective date to 1 January
ment loss or reversal of an impairment loss has been recognised
2017 at the earliest and the fact that adoption of the standard
in the reporting period. The amendments address the problem
by the EU has not yet been recommended, the Group has not
that made the disclosure requirements under IAS 36 broader
yet performed an in-depth evaluation of the potential effects
than intended. The amendments also introduce new disclosure
of IFRS 9.
requirements if the recoverable amount of an asset or cashgenerating unit for which an impairment loss has been recog-
Amendment to IFRS 10, IFRS 11 and IFRS 12 Consolidated
nised or reversed has been determined based on fair value less
Financial Statements, Joint Arrangements, Disclosure
costs of disposal (e.g. description of the valuation technique
of Interests in Other Entities – Transition Guidance
used to measure fair value, disclosure of all key assumptions
These amendments provide for additional relief when applying
used in the measurement).
IFRS 10, IFRS 11 and IFRS 12 for the first time.
Amendment to IAS 39 Novation of Derivatives
Amendment to IAS 32 – Offsetting Financial Assets and
In response to the new derivatives trading rules under the
Financial Liabilities and IFRS 7 Financial Instruments:
European Market Infrastructure Regulation (EMIR) introduced
Disclosures – Offsetting Financial Assets and Financial
due to the tougher regulation of the derivative market world-
Liabilities
wide, the IASB published narrow scope amendments to IFRS 9
The IASB has issued an amendment to the application guidance
and IAS 39 on the recognition of financial instruments. Pre
contained in IAS 32 Financial Instruments: Presentation to
viously, novation to a central counterparty required the dis-
clarify certain requirements regarding the offsetting of finan-
continuation of hedging relationships if a derivative was the
79
hedging instrument. The amendments provide for the contin-
Provided they are adopted by the EU in their current form, the
uation of the original hedging relationship subject to certain
Group does not currently expect the other new accounting
conditions and should help avoid ineffectiveness for cash flow
pronouncements to have a material effect on the consolidated
hedges. Novation to a counterparty must happen as a conse-
financial statements.
quence of laws or regulations. In addition, any changes to the
contract terms must be limited to those areas that are
BASIS OF CON SOLIDATION
required for the novation. Following the novation, the central
The basis of consolidation of the TOM TAILOR GROUP com-
counterparty must become the new counterparty to each
prises TOM TAILOR Holding AG as the ultimate parent and the
of the parties to the derivative.
following subsidiaries:
Amendment to IAS 19 Defined Benefit Plans:
Direct Subsidiaries
Employee Contributions
–Tom Tailor GmbH, Hamburg/Germany
The amendments are intended to provide relief by allowing
–Tom Tailor (Schweiz) AG, Baar/Switzerland
entities to deduct employee or third-party contributions
–BONITA GmbH, Hamminkeln/Germany
to defined benefit plans in the period in which service is rendered. If the employee contributions are independent of
Indirect Subsidiaries
the number of years of service, they can be recognised as a
–Tom Tailor Retail GmbH, Hamburg/Germany
reduction of the service cost in the period in which the
– TOM TAILOR E-Commerce GmbH & Co. KG,
service is rendered. Otherwise, the employee contributions
Oststeinbek/Germany
are attributed to the years of service in accordance with the
–TOM TAILOR Verwaltungs-GmbH, Hamburg/Germany
plan’s benefit formula.
–TOM TAILOR Gesellschaft m.b.H., Wörgl/Austria
–TOM TAILOR Retail Gesellschaft m.b.H., Wörgl/Austria
In December 2013, the IASB issued its fifth round of annual
–TOM TAILOR Retail Joint Venture GmbH,
Bregenz/Austria
improvements as an exposure draft of proposed amendments
–TT RETAIL GmbH, Lindau/Germany
to six IFRSs. The amendments are intended to eliminate
–TT Franchise AG, Buchs/Switzerland
ambiguities in existing IFRSs. The EU is expected to adopt the
–Tom Tailor Benelux B.V., Almere/the Netherlands
final standard in the fourth quarter of 2014. Unless other-
–Tom Tailor (Schweiz) Retail AG, Dietikon/Switzerland
wise specified below, the proposed amendments are applicable
–Tom Tailor Showroom AG, Glattbrugg/Switzerland
prospectively from 1 January 2014. The following areas have
–TOM TAILOR FRANCE SARL, Paris/France
been clarified: requirements regarding share-based payments
–TOM TAILOR Retail Kft., Budapest/Hungary
(IFRS 2), business combinations (IFRS 3), segment reporting
–TOM TAILOR South Eastern Europe Holding GmbH,
(IFRS 8), fair value measurement (IFRS 13), property, plant and
Wörgl/Austria
equipment and intangible assets (IAS 16 and IAS 38), related
–Tom Tailor Sarajevo d.o.o., Sarajevo/Bosnia-Herzegovina
party disclosures (IAS 24).
–TOM TAILOR Beograd d.o.o., Belgrade/Serbia
–Tom Tailor Sofia EOOD, Sofia/Bulgaria
–Tom Tailor Zagreb d.o.o., Zagreb/Croatia
In December 2013, the IASB issued its sixth round of annual
–TOM TAILOR Lesce d.o.o., Lesce/Slovenia
improvements as an exposure draft of proposed amendments
–TOM TAILOR Retail Poland Sp. z o.o., Warsaw/Poland
to four IFRSs. The amendments are intended to eliminate
–TOM TAILOR Sourcing Ltd., Hong Kong/China
ambiguities in existing IFRSs. The EU is expected to adopt the
–TOM TAILOR Asia Ltd., Hong Kong/China
final standard in the fourth quarter of 2014. Unless other-
–TOM TAILOR RUS LLC, Moscow/Russia
wise specified below, the proposed amendments are applicable
–TOM TAILOR Retail Slovakia s.r.o., Bratislava/Slovakia
prospectively from 1 January 2014. The following areas have
–TOM TAILOR VELEPRODAJA d.o.o., Lesce/Slovenia
been clarified: first-time adoption of IFRSs (IFRS 1), business
–TOM TAILOR VELEPRODAJA d.o.o., Belgrade/Serbia
combinations (IFRS 3), fair value measurement (IFRS 13), invest-
–TOM TAILOR Italy SRL, Bolzano/Italy
ment property (IAS 40).
–TOM TAILOR RETAIL RO SRL, Bucharest/Romania
80
–BONITA Deutschland Holding Verwaltungs GmbH,
Hamminkeln/Germany
–BONITA E-commerce GmbH, Oststeinbeck/Germany
Tom Tailor GmbH has a call option to acquire the 49 % noncontrolling interest. This option can be exercised on 1 January
2016 for the first time and has an indefinite term.
–GEWIB GmbH, Hamminkeln/Germany
– GEWIB GmbH & Co. KG, Pullach/Germany
The purchase price payable for the two options to acquire the
–BONITA SAS, Paris/France
remaining shares will be based on the current fair value of
–BONITA (Schweiz) Retail AG, Baar/Switzerland
the shares when the option is exercised. No value was stated
–BONITA ITALIA S.R.L. UNIPERSONALE, Verona/Italy
as the call options could not be reliably measured as at the
–BONITA Österreich Handels GmbH, Salzburg/Austria
reporting date.

Indirect Equity Interests
Changes in the Basis of Consolidation
–TT OFF SALE (NI) LTD., Belfast/United Kingdom
To streamline the previous structure of the BONITA subgroup
–TT OFF SALE (Ireland) LTD., Dublin/Ireland
at a company law level, BONITA GmbH & Co. Kommandit-

gesellschaft, Hamminkeln, and BONITA Werbeagentur Logistik All subsidiaries are wholly owned by the parent company with
& Service GmbH & Co. KG, Hamminkeln, were merged with
the exception of TOM TAILOR South Eastern Europe Holding
BONITA Deutschland Holding GmbH, Hamminkeln, following
GmbH and its subsidiaries, TOM TAILOR Sourcing Ltd., TOM TAILOR
withdrawal of the general partner companies. BONITA
Retail Joint Venture GmbH and TOM TAILOR RETAIL RO SRL.
Deutschland Holding GmbH was renamed BONITA GmbH.
TT OFF SALE (NI) LTD., Belfast/United Kingdom, was formed in
BONITA (Schweiz) Retail AG, Baar/Switzerland, and Bonita
financial year 2008. As a founding shareholder, Tom Tailor
SAS, Paris/France, were formed to develop and expand the
GmbH holds 49.0% of the shares in TT OFF SALE (NI) LTD. and
BONITA brand’s retail business in Switzerland and France.
its wholly owned subsidiary, TT OFF SALE (Ireland) LTD.,
BONITA GmbH, Hamminkeln, holds all shares of both sub-
Dublin/Ireland.
sidiaries.
The interest in TT OFF SALE (NI) LTD. and its subsidiary TT OFF
In addition, BONITA ITALIA S.R.L. UNIPERSONALE, Verona/
SALE (Ireland) LTD. is included in the consolidated financial
Italy, was formed. The company’s goal is to drive the BONITA
statements using the equity method. The reporting date of
brand’s future retail expansion in Italy. BONITA GmbH,
these companies corresponds to that of the consolidated
Hamminkeln, holds all of the share capital amounting to
financial statements. For further information, please refer
EUR 100 thousand.
to the section “Investment Securities”.
On 10 July 2013, BONITA GmbH, Hamminkeln, acquired all of
In financial year 2013, Tom Tailor GmbH increased its interest
the shares of BONITA Österreich Handels GmbH, Salzburg,
in TOM TAILOR South Eastern Europe Holding GmbH, Wörgl/
Austria, for a purchase price of EUR 1.8 million. The purchase
Austria, from 51% to 75% for a purchase price of EUR 5.0 mil-
was not classified as a business combination in accordance
lion. Tom Tailor GmbH has a call option to acquire the re
with IFRS 3. The beneficial leases acquired were recognised as
maining 25% non-controlling interest in TOM TAILOR South
intangible assets in the amount of EUR 1.6 million in the con-
Eastern Europe Holding GmbH, Wörgl/Austria. The option
solidated balance sheet.
can be exercised at any time and expires in November 2016.
The new subsidiaries TOM TAILOR VELEPRODAJA d.o.o., domiIn 2011, TOM TAILOR established a joint venture with its long-
ciled in Belgrade/Serbia, and TOM TAILOR ITALY SRL, domi-
standing partner Asmara International Ltd., domiciled in Hong
ciled in Bolzano/Italy, were formed to expand wholesale
Kong. TOM TAILOR holds a 51% majority interest in TOM TAILOR
activities in South-East Europe and Italy. Tom Tailor GmbH,
Sourcing Ltd., Hong Kong, which was formed in December 2011.
Hamburg, holds all shares of both subsidiaries, amounting
49% of the shares are held by its partner, Asmara International
to EUR 10 thousand each.
Ltd. The company is fully consolidated in the TOM TAILOR
GROUP because of the exercise of control; the non-controlling
Effective 1 May 2013, the TOM TAILOR GROUP acquired a 51%
interest is reported separately.
interest in S.C. TOM TAILOR RETAIL RO SRL, Bucharest, Romania.
81
This acquisition is designed to accelerate the strategic expan-
In accordance with the requirements of IFRS 3, Business Com-
sion of the controlled selling spaces and the TOM TAILOR brand
binations, all assets acquired and liabilities and contingent
in Romania. As a result of the agreement, the TOM TAILOR
liabilities assumed are recognised at their fair value. Purchase
GROUP has acquired five stores that are operated as its own
price allocation resulted in the recognition of goodwill
retail stores.
amounting to EUR 1.4 million. This goodwill is justified economically by the fact that the acquirer will benefit from
The purchase price for the 51% interest acquired, which has
the expected positive business development of the acquiree
been recognised as a cash expenditure, initially amounts
in the future.
to EUR0.5 million of the entire share capital of EUR0.5 million.
The acquired company has been consolidated effective 1 May
Since the acquisition date, the acquired stores of S.C.
2013 in the TOM TAILOR GROUP, and no non-controlling inter-
TOM TAILOR RETAIL RO SRL have contributed EUR 1.5 million
ests are reported, because it is controlled and because it is
to consolidated revenue and EUR – 0.1 million to consoli-
certain that the remaining 49 % interest will be acquired by
dated net income for the period. Because of the existing cus-
2018 on the basis of the existing put/call options and the
tomer relationships in the wholesale segment and the lack
other contractual arrangements. The purchase price for the
of comparable delivery and payment conditions, it is not pos-
acquisition of the remaining interest is largely variable and
sible to estimate the effects of the business combination
is contingent on the earnings performance of the acquired
as if it had occurred at the beginning of financial year 2013.
company. Based on the agreements that have been entered
the provisional cost of the acquisition has been estimated
G ROU P RE P OR TING DATE A ND
G ROU P FIN A NCIAL Y EA R
at approximately EUR 1.0 million. Only EUR 0.5 million of the
As in the previous year, the consolidated financial statements
total purchase price has been recognised as a cash ex
were prepared as at the Group reporting date, 31 December.
penditure to date. The liability recognised provisionally for
The Group’s financial year covers the period from 1 January to
the purchase price is reported at its fair value as a non-
31 December 2013 (2012: 1 January to 31 December 2012).
into and the planning assumptions for the period up to 2016,
current liability.
The Group reporting date and the Group’s financial year cor
Purchase price allocation (PPA) for the acquisition is still pre-
respond to the reporting date of the parent company and the
liminary overall.
financial year of all consolidated subsidiaries.
The following table shows the purchase price of the shares
acquired and the fair value of the assets acquired and liabilities
assumed:
Preliminary Fair Values
at Acquisition Date
EUR thousand
Preliminary
fair value
Property, plant and equipment
623
Inventories
377
Other assets
Total assets
Trade payables
27
122
1,149
979
Other liabilities
530
Total liabilities
1,509
Net assets acquired
–360
Purchase price
1,048
Positive goodwill
1,408
82
A C C O U N TI N G P OLI C IES
AND
C O N SOLIDATIO N METHODS
CU RRE NC Y TR A N SLATION
The TOM TAILOR GROUP’s currency is the euro (EUR).
Financial statements of Group companies included in the
consolidated financial statements that are prepared in foreign
currencies are translated on the basis of the functional cur
G E NE R AL PR INCIPLES
rency concept (IAS 21) using the modified closing rate method.
The financial statements of the companies included in the
The functional currency of the subsidiaries depends on the
consolidated financial statements are prepared using uniform
primary economic environment in which they operate and
accounting policies in accordance with IAS 27.
therefore corresponds to the local currency in each case.
In the consolidated financial statements, expenses and income
CON SOLIDATION METHODS
from the financial statements of subsidiaries that are prepared
Acquisition accounting uses the acquisition method in accord-
in foreign currencies are translated at the average exchange
ance with IFRS 3. The proportionate share of the subsidiar-
rates for the year, while assets and liabilities are translated at
ies’ assets acquired and liabilities assumed is measured at the
the middle rate on the reporting date. Foreign exchange dif-
acquisition date fair value. Transaction costs are expensed.
ferences from the translation of equity at historical cost are
reported in accumulated other comprehensive income, as are
Any remaining excess of the cost of the investment over the
translation differences from the income statement.
share of the fair value of the net assets acquired is recognised
as goodwill and tested for impairment regularly, and at least
In the single-entity financial statements of the companies
once a year. Negative goodwill is recognised as income imme-
included in the consolidated financial statements, foreign cur-
diately after the acquisition following a reassessment of the
rency receivables and liabilities are measured at cost on their
net assets acquired.
addition. Foreign exchange gains and losses realised as at the
reporting date are recognised in profit or loss.
Profits and losses on intra-Group transactions are eliminated.
Revenue, expenses and income, and intercompany receiv
The exchange rates on which currency translation is based
ables, liabilities and provisions are offset against each other.
and which have a significant influence on the consolidated
Intercompany profits and losses contained in non-current
financial statements changed as follows:
assets and inventories due to intra-Group deliveries are also
eliminated.
Key Exchange Rates
Closing rate
Deferred taxes are recognised where required in respect of
Average rate
temporary differences arising from consolidation adjustments
EUR versus
31/12/2013
31/12/2012
2013
2012
in accordance with IAS 12.
US dollars
1.38
1.32
1.33
1.28
Swiss francs
1.23
1.21
1.23
1.21
In the reporting period, the consolidated Group was expanded
to include the following companies and their subsidiaries:
–TOM TAILOR VELEPRODAJA d.o.o., Belgrade/Serbia
RECO G NITION OF INCOME A ND E XPE N SES
–TOM TAILOR Italy SRL, Bolzano/Italy
Revenue from the sale of products is recognised when the title
–TOM TAILOR RETAIL RO SRL, Bucharest/Romania
and risk passes to the customer, provided that a price has
–BONITA SAS, Paris/France
been agreed or is determinable and payment can be assumed.
–BONITA (Schweiz) Retail AG, Baar/Switzerland
Revenue is reported net of discounts, markdowns, cus-
–BONITA ITALIA S.R.L. UNIPERSONALE, Verona/Italy
tomer bonuses and rebates, and following the elimination of
–BONITA Österreich Handels GmbH, Salzburg/Austria
intra-Group sales.

These companies have been initially consolidated; where
applicable, non-controlling interests are reported in the consolidated financial statements.
83
In its retail business, the Group has a customer loyalty pro-
G OODW ILL
gramme that allows customers to collect loyalty points for
Goodwill from acquisition accounting is capitalised and tested
each purchase made via the online shop or in stores, depending
regularly for impairment at least once a year, in accordance
on how much they spend. Once customers have collected a
with IAS 36.
certain number of points, they can exchange them for a
voucher. The purchase price received is broken down into the
Impairment tests are also conducted in the case of triggering
goods sold and the points issued, with the consideration
events that indicate that goodwill might be impaired.
being allocated to the points on the basis of their fair value.
The consideration is only recognised as revenue when the
OTHE R INTA NG IB LE ASSETS
customer has redeemed the voucher and the Company has
In accordance with IAS 38, purchased and internally generated
discharged its obligation.
intangible assets are recognised if it is probable that expected
future benefits will flow from their use and if the cost of the
Royalties and other income are recognised on an accrual basis
asset can be measured reliably. They are measured at cost and,
in accordance with the underlying contractual provisions.
in the case of finite-lived assets, are amortised using the
straight-line method over their useful lives of between three
Operating expenses are recognised when the underlying prod-
and 17 years.
ucts or services are utilised, or at the time they are incurred.
Indefinite-lived intangible assets are tested regularly for
Interest is recognised pro rata on the basis of the effective
impairment at least once a year, and written down to their
interest rate for the assets and liabilities.
recoverable amount if an impairment has occurred. Writedowns are reversed up to cost if the reasons for impairment
BUSINESS COMBIN ATION S
have ceased to apply.
Business combinations are accounted for using the acquisition method, in which the purchase price is offset against the
Amortisation and impairment losses are reported under
remeasured proportionate share of the net assets of the
the “Depreciation, amortisation and impairment losses” item
acquiree (capital consolidation). This is based on the values
of the income statement.
applicable at the acquisition date, which is defined as the
date on which control of the acquiree was obtained. Differ-
Development costs are expensed since the conditions for cap-
ences are identified in full, i.e. recognisable assets, liabilities
italisation set out in lAS 38 are not met. They relate primarily
and contingent liabilities of the subsidiary are reported in
to the costs of developing collections and of establishing new
principle at their fair value in the consolidated financial state-
product lines.
ments, independent of any non-controlling interests. The
published quoted or market prices at the acquisition date
PROPE R T Y, PLA NT A N D
EQU IPME NT
or external appraisals. If no such quoted or market prices are
In accordance with IAS 16, all property, plant and equipment is
available, the fair values are determined using the most reli
measured at cost less depreciation and, if appropriate, im-
able information available, based on market prices for compa-
pairment losses. Property, plant and equipment is depreciated
rable assets and transactions or appropriate valuation tech-
over the assets’ useful lives using the straight-line method.
niques. Intangible assets are recognised separately if they are
Items of finite-lived property, plant and equipment with dif-
clearly identifiable or separable, or if recognition is based
ferent useful lives are depreciated separately.
fair value of individual assets is determined, for example, using
on a contractual or other legal right. To this extent, they are
not included in goodwill. No additional provisions for the
Low-value assets costing less than EUR 150.00 are written off
costs of restructuring may be recognised during purchase
in full in the year of acquisition, due to materiality reasons.
price allocation. If the purchase price paid exceeds the
remeasured proportionate share of net assets at the acquisition date, the positive difference is recognised as goodwill.
After reassessment, any negative goodwill is recognised as
income immediately.
84
Depreciation is based on the following standardised useful
being subject to a finance lease are recognised at their fair
lives throughout the Group:
value or, if lower, at the present value of the minimum lease
payments.
Useful Lives of Property, Plant and Equipment
They are depreciated using the straight-line method over the
shorter of the expected useful life or the lease term. Payment
Useful lives
Buildings
25 –50 years
Shop fittings and fixtures and leasehold improvements
5–10 years
IT and other technical equipment
3–10 years
Other equipment, operating and office equipment
1–5 years
obligations resulting from future lease payments are rec
ognised at their present value in the financial liabilities item.
The interest portion of lease liabilities is expensed over the
lease term.
Both the useful lives and the cost are tested periodically for
IN V ESTME NT SECU RITIES
conformity with the pattern of consumption of the eco-
Shares in unconsolidated affiliates are measured at the lower
nomic benefits. Assets are tested for impairment if there are
of cost or fair value. Their value is less than EUR 1 thousand.
indications that their carrying amount might exceed the
recoverable amount.
The 49% interests in the share capital of TT OFF SALE (NI)
LTD. and of TT OFF SALE (Ireland) LTD. are included in the con-
IMPAIRMENT OF ASSETS
solidated financial statements using the equity method.
The TOM TAILOR GROUP tests intangible assets and property,
plant and equipment for impairment as soon as there are indi-
FIN A NCIAL IN STRU ME NTS
cations that the asset may be impaired. Impairment testing is
General
performed by comparing the carrying amount with the recov-
Financial instruments are accounted for in accordance with
erable amount. Recoverable amount is defined as the higher
IAS 39 and – to the extent that this is relevant for the
of fair value less costs to sell and the present value of the es-
TOM TAILOR GROUP – broken down into the following catego-
timated future cash flows from the value in use of the asset.
ries: at fair value through profit or loss, held to maturity,
If the carrying amount exceeds the recoverable amount, the
available for sale, and loans and receivables.
asset is written down by the difference. If the reasons for
impairment recognised in previous years no longer apply, the
Classification depends on the purpose for which the financial
impairment loss is reversed appropriately.
instruments were acquired.
Annual impairment testing for goodwill from initial consolida-
Financial instruments include both non-derivative and
tion and other indefinite-lived intangible assets is performed
derivative assets and liabilities. Derivatives are used to hedge
at the level of the relevant cash-generating unit. Impairment
the fair value of balance sheet items or future cash flows.
testing is performed by comparing the carrying amount of the
cash-generating unit, including the allocable goodwill or
Trade date accounting is used for all purchases and sales of
the carrying amounts of the other indefinite-lived intangible
financial assets. Financial assets are generally initially rec
assets, with the recoverable amount. If the carrying amount
ognised as from the point when the Group enters into the
exceeds the recoverable amount for the cash-generating unit,
contract.
the resulting difference is charged to income as an impairment
loss. Goodwill that has been written down is not reversed in
Financial instruments are recognised at amortised cost or fair
subsequent years.
value. Loans and receivables are subsequently measured
at amortised cost using the effective interest rate method.
FIN A NCE LEASES
Financial assets are derecognised when the contractual
In accordance with IAS 17, the lessee is considered to be the
rights to payment from the investment have expired or been
beneficial owner of the leased assets if substantially all the
transferred and the Group has transferred substantially all
risks and rewards incidental to ownership of the assets are
the risks and rewards incidental to ownership of the assets or,
transferred to the lessee (finance lease). Assets classified as
in the case of loans and receivables, on payment.
85
Fair value generally corresponds to the market or quoted
Derivatives were used at the Group in the reporting period to
market price. Where no active market exists, fair value is deter-
hedge interest rate and exchange rate risks from the operating
mined using accepted valuation techniques on the basis of
business, and in particular to hedge forecast purchases of
the market inputs applicable on the reporting date in question
goods in foreign currencies. TOM TAILOR Holding AG hedges
plus confirmations from banks.
cash flows on the basis of predefined minimum hedge ratios.
At the level of the Company, highly probable forecast trans
Financial assets and groups of assets are assessed for objective
actions that are expected to occur within a 12-month period
evidence of impairment at each reporting date.
are hedged against exchange rate risks using rolling budget
planning. These hedges are reported as cash flow hedges in
Financial assets are initially recognised at fair value, plus trans-
accordance with IAS 39.
action costs in the case of financial assets not at fair value
through profit or loss.
Derivatives used in cash flow hedge accounting are recognised at their fair value. The intrinsic value and the time value
Loans and receivables that are not held for trading, held-to-
of the hedging relationship are designated. Measurement
maturity financial investments and all financial assets for
gains and losses are broken down into an effective and an
which there is no quoted market price in an active market and
ineffective portion. Effectiveness is measured using the criti-
whose fair value cannot be reliably estimated are measured
cal terms match method. The effective portion of the gain
at amortised cost using the effective interest rate method, to
or loss on the hedging instruments is recognised in other com-
the extent that they have a fixed maturity.
prehensive income after adjustment for deferred taxes,
and is reclassified to profit or loss as soon as the hedged cash
Financial assets with no fixed maturity are measured at cost.
flows are also recognised in the income statement, or if a
hedged future transaction does not materialise. Ineffective
In accordance with IAS 39, an assessment is made at regular
portions of the hedging relationship are recognised immedi-
intervals whether there is objective evidence that a financial
ately in income.
asset or group of financial assets is impaired. Any impairment
loss that has to be charged following impairment testing is
DE FE RR ED TA XES
recognised in profit or loss.
In accordance with IAS 12, deferred tax assets and liabilities
are recognised for all temporary differences between the tax
Derivatives and Hedge Accounting
base and the IFRS carrying amounts (“balance sheet liability
In accordance with IAS 39, derivatives are initially recognised
method”), with the exception of deferred tax liabilities arising
at their fair value on the date when the contract is entered
from the initial recognition of goodwill or the initial recogni-
into. Subsequent measurement is also performed using the fair
tion of an asset or liability from a transaction that is not a busi-
value at the respective reporting date. In accordance with
ness combination and, at the time of the transaction, af-
IAS 39, derivatives that are not part of a hedging relationship
fects neither accounting profit nor taxable profit, as well as in
(hedge accounting) are required to be designated as at fair value
respect of certain consolidation adjustments.
through profit or loss. The method used to recognise gains
or losses depends on whether the derivative concerned was
Deferred tax assets and liabilities are offset if the Group has
classified as a hedge, as well as on the type of item hedged.
a legally enforceable right to set off the current tax assets
and liabilities and these assets and liabilities relate to income
Derivatives may be embedded in other contracts (“host con-
taxes levied by the same taxation authority on the same
tracts”). If IAS 39.11 requires an embedded derivative to be
taxable entity.
separated, it is accounted for separately from the host contract
and measured at fair value. Separable embedded derivatives
Deferred tax assets also comprise tax credits relating to the
are measured at a carrying amount of zero on initial recognition
expected utilisation of existing tax loss carryforwards, in
and are subsequently measured at fair value at the reporting
particular from interest-related losses. Deferred taxes are
date. Gains and losses from changes in fair value of derivatives
determined using the tax rates and tax laws that have been
that do not form part of designated hedging relationships are
enacted or substantively enacted by the date of realisation
recognised in full in profit or loss for the period.
in the countries in question.
86
The composite tax rate determined for deferred taxes in
attributable to raising equity capital are reasonably broken
Germany was 30.6% (2012: 30.5%). This comprises the
down into costs to be directly charged to equity and costs to
corporation tax rate of 15.0% (2012: 15.0%), the solidarity sur-
be expensed in the reporting period.
charge of 5.5% of the corporation tax rate (2012: 5.5%) and
the average trade tax rate in the Group of 14.8% (2012: 14.7 %).
DI V IDE ND DISTR IBUTION
In the case of foreign companies, the relevant national tax
Shareholder claims to dividend distributions are recognised as
rates are applied.
liabilities in the period in which the corresponding resolution
was passed.
Deferred taxes are recognised as non-current and are not
discounted.
EMPLOY EE B E NE FITS
Pension Obligations
Changes in deferred taxes in the balance sheet result in
Provisions for pensions are recognised using the projected
principle in deferred tax expense/income. To the extent that
unit credit method in accordance with IAS 19, which was
accounting matters resulting in a change to deferred taxes
applied on the basis of a conservative estimate of the relevant
are recognised directly in equity or in other comprehensive
inputs. The calculations are based on actuarial reports, taking
income, the corresponding change in deferred taxes is
biometric parameters into account. The present value of
also recognised directly in equity or in other comprehensive
the defined benefit obligation is offset against the fair value
income.
of the capitalised surrender value of qualifying insurance
policies (“plan assets”).
RECEI VA B LES A N D OTHE R ASSETS
Receivables and other assets are recognised at cost. Appro
Actuarial gains and losses have been expensed in full so far.
priate valuation allowances are charged to reflect all identifi-
In the year concerned, actuarial gains and losses were recog-
able risks. Non-interest-bearing and low-interest receivables
nised in other comprehensive income for the first time. The
with a term of more than one year are discounted; TOM TAILOR
interest cost on expected pension obligations and the expect-
uses the effective interest rate method for this. The collecta-
ed return on plan assets are reported in the financial result.
bility of receivables is assessed on the basis of the probability
All other expenses from the funding of pension obligations
of default. Specific valuation allowances are charged individ
are reported in the personnel expenses item.
ually on receivables that are past due.
Other Long-Term Employee Benefits
IN V E NTOR IES
The Long-Term Incentive Programme, which is measured
Raw materials, consumables and supplies and merchandise
in accordance with IAS 19 as a defined benefit obligation, was
are measured at average cost.
granted to senior managers of the Group and is classified
as other long-term employee benefits. The present value of
Where necessary, write-downs to their lower selling prices
the defined benefit obligation is calculated by discount-
less costs to sell were recognised.
ing the benefit earned using the projected unit credit method.
The payment obligation resulting from the programme is
Inventory risk associated with individual inventory items is
recognised to the extent that the beneficiaries perform their
accounted for using specific valuation allowances on the basis
services in exchange for the payments expected to be
of obsolescence analyses and analyses of days inventory held.
made by TOM TAILOR in future reporting periods. The expenses are reported under personnel expenses with the excep-
C ASH FU NDS
tion of interest cost, which is recognised in the financial
Cash funds are measured at their nominal value.
result.
COSTS O F R AISING EQU IT Y C A PITAL
SHA RE-BASED PAY ME NT
In accordance with IAS 32, costs directly attributable to capital
In accordance with IFRS 2, the obligations under the Matching
raising are charged to capital reserves net of the related
Stock Programme (MSP) established for the Management
income tax benefit. Incremental costs that would otherwise
Board are measured using valuation techniques based on
have been avoided are expensed. Costs that are not clearly
option pricing models (Monte Carlo simulation).
87
lished for management in 2013 (hereinafter referred to as the
SIG NIFIC A NT J U D G EME NTS, ESTIMATES
A ND ASSU MP TION S
Long-Term Stock Option Programme) are measured using
Preparation of the consolidated financial statements requires
option pricing models (Black-Scholes model), in accordance
management to make judgements, estimates and assump-
with IFRS 2.
tions that affect the amounts of reported assets and liabilities,
The obligations under the stock option programme estab-
income and expenses, and contingent liabilities. In particular,
Equity-settled share-based payment transactions are meas-
estimates and assumptions are used when identifying hidden
ured at the fair value of the equity instruments as at the grant
reserves in the course of goodwill allocation during acquisi-
date. For further information on how the fair value of the
tion accounting, when performing impairment tests on intan-
equity-settled share-based payment transactions is calculated,
gible assets and property, plant and equipment, when deter-
please see section “Other Disclosures and Explanations”.
mining standard useful lives for assets throughout the Group,
when assessing the collectability of receivables, when rec-
The fair value of the equity instruments is recognised ratably
ognising and measuring provisions, and when estimating the
over the vesting period in personnel expenses, with a corres
ability to realise future tax benefits. Particularly when ac-
ponding increase in equity, and is based on different inputs.
counting for business combinations, the assets acquired and
The Group reviews its estimates regarding the number of equity
liabilities assumed are recognised at their fair value. Discounted
instruments and the inputs on each reporting date. Differ-
cash flow methods are commonly used here, the results of
ences between the initial recognition of the options and the
which depend on assumptions as to future cash flows and
amounts are allowed for and recognised in income. After this,
other factors. Although these estimates are made on the basis
a corresponding equity adjustment is made.
of management’s current knowledge, actual results may deviate from these estimates. Changes resulting from new infor-
OTHE R PROV ISION S
mation within 12 months of initial consolidation are accounted
Other provisions are recognised where there is a legal or
for by adjusting goodwill. Changes above and beyond this are
constructive obligation to third parties that will probably lead
recognised in profit or loss at the point in time when the new
to an outflow of resources embodying economic benefits,
information becomes available.
where the amount of the provision can be measured with sufficient reliability. The provisions are measured at fully absorbed
BORROW ING COSTS
cost. Non-current provisions with a term of more than one
Borrowing costs that are directly attributable to the acquisi-
year are recognised at their settlement amount discounted to
tion, construction or production of an asset that is manu
the reporting date.
factured over a considerable period of time are capitalised as
part of the cost of that asset. All other borrowing costs are
Unless the possibility of an outflow of resources embodying
expensed in the period in which they are incurred.
economic benefits is remote, contingent liabilities are disclosed in the notes to the consolidated financial statements.
E V E NTS A F TE R THE E ND OF THE R E P O R TING
PE R IOD
FIN A NCIAL A N D OTHE R LIA BILITIES
Events after the end of the reporting period that provide addi-
Financial liabilities are initially recognised at cost, which cor-
tional information on the Group’s position on the reporting
responds to the fair value of the consideration received.
date (adjusting events) are reflected in the financial statements.
Transaction costs are taken into account. Subsequently, the
liabilities – with the exception of derivatives – are measured
Where material, events after the end of the reporting period
at amortised cost using the effective interest rate method.
that are not reflected in the financial statements (non-adjust-
Other liabilities are recognised at their repayment amount.
ing events) are disclosed in the notes.
88
I N C OME STATEME N T
DIS C LOS U R ES
(3) COST OF MATE R IALS
Cost of materials primarily comprises expenses for purchased
merchandise.
The individual items in the income statement for financial
(4) PE R SONNEL E XPE N SES
years 2012 and 2013 are only comparable to a limited extent
Personnel expenses are composed of the following items:
due to the acquisition of the BONITA Group on 8 August 2012.
Personnel Expenses
(1) RE V E N U E
Revenue comprises amounts charged to customers for goods
EUR thousand
and services, less sales allowances.
Wages and salaries
Social security contributions, post-employment and other employee benefit costs
The classification of revenue by operating segments and
region is based on the segment reporting.
2013
2012
163,835
104,262
29,669
17,239
193,504
121,501
(2) OTHE R OPE R ATING INCOME
The wages and salaries item includes expenses in the amount
Other operating income is composed of the following items:
of EUR 233 thousand (2012: EUR 257 thousand) for the MSP
share-based remuneration programme, as well as expenses in
the amount of EUR972 thousand (2012: EUR7,599 thousand)
Other Operating Income
and EUR 122 thousand for the LTI programme and Long-Term
2013
2012
Royalties
4,784
3,612
Foreign exchange gains
4,445
983
Rental income
3,446
1,908
Insurance refunds
3,166
193
Income from recharged marketing expenses
2,026
1,817
higher average number of employees is mainly attributable
Recharged freight and other costs
1,690
1,966
to the acquisition of BONITA Group in August 2012 and the
Shopfitting commissions/bonuses
1,128
3,541
further expansion in the past financial year.
Onward charging of delivery costs of
online business
1,037
311
Excluding the Management Board and casual workers, the
519
655
average number of employees was as follows:
–
11,092
EUR thousand
Income from claims for compensation
Income from negative goodwill
Miscellaneous operating income
5,191
3,345
27,432
29,423
Stock Option Programme granted to managers.
The sharp year-on-year rise in personnel expenses is primarily
due to the considerable increase in the average number
of employees in the financial year. In the retail segment, the
Number of Employees
2013
In addition to the largely revenue-related increase in royalties,
Wholesale
insurance refunds for transport damage to goods in transit
Retail
increased from EUR0.2 million to EUR 3.2 million in financial
2012
562
521
5,791
2,954
6,353
3,475
year 2013.
Payroll expenses included severance payments in the
Rental income is attributable to the subletting of space we
amount of EUR 2,140 thousand (2012: EUR 1,180 thousand).
lease ourselves. The year-on-year increase is mainly due to
Together with additions to defined benefit plans in the
rental income in the first seven months of financial year 2013,
amount of EUR 26 thousand (2012: EUR 399 thousand),
which was not included in the prior-year figures due to the
personnel expenses also included defined contribution
acquisition of the BONITA Group in August 2012.
obligations in the form of employer contributions to statutory pension insurance in the amount of EUR 12.3 million
(2012: EUR 5.9 million).
89
(5) DE PR ECIATION , AMOR TISATION A ND
IMPAIRME NT LOSSES
(7) FIN A NCIAL RESU LT
The composition of depreciation, amortisation and impairment losses is presented in the disclosures on intangible
assets (note 10) and property, plant and equipment (note 11).
Financial Result
2013
EUR thousand
Financial expense
The increase in depreciation, amortisation and impairment
losses was due in particular to the acquisition of the BONITA
2012
80
323
–18,381
–16,106
–18,301
–15,783
Financial income
Group in 2012 and capital expenditure in connection with
TOM TAILOR’s expansion activities in previous financial years
The financial result is largely attributable to bank loans taken
and in the reporting period.
out, transaction-related financing costs and the draw-down
of other operating bank lines of credit.
(6) OTHE R O PE R ATING E XPE N SES
Other operating expenses are composed of the following
Financial expenses primarily increased due to the higher inter-
items:
est payments resulting from the acquisition financing obtained
in 2012 and transaction-related financing costs of EUR3.5 million (2012: EUR4.7 million). The increased seasonal use of oper-
Other Operating Expenses
EUR thousand
Distribution expenses
Administrative expenses
Operating and other expenses
ating bank lines of credit as a result of the expansion of busi2013
2012
49,233
39,888
ness activities also contributed to the increase.
39,473
31,882
180,075
114,293
lion (2012: financial income of EUR0.1 million) from the fair
268,781
186,063
value measurement of financial liabilities.
The financial result included financial expenses of EUR 1.2 mil-
The increase in other operating expenses is largely attributable
As well as these effects, financial expenses included expenses
to the acquisition of BONITA in August of the previous year.
of EUR 58 thousand (2012: EUR89 thousand) from the unwinding of discounted pension provisions, as well as expenses of
At EUR 29.3 million (2012: EUR 25.0 million), distribution ex-
EUR 147 thousand (2012: EUR0 thousand) from the unwinding
penses mainly related to marketing expenses, including the
of discounts on other provisions.
cost of producing and broadcasting a TV commercial.
Fees and structuring costs paid in connection with the re
The most significant expense within the administrative
financing in 2013 totalling EUR0.6 million (2012: EUR9.1 million)
expenses item was legal and consulting fees, which totalled
are amortised over the expected term of the underlying loan
EUR 11.1 million (2012: EUR 13.6 million). Legal and consult-
using the effective interest method.
ing fees are mainly attributable to the integration costs for
BONITA, which amounted to EUR 10.7 million in 2013.
At EUR 120.0 million (2012: EUR68.4 million), total rent was
the largest cost item of operating and other expenses.
Rental expenses and incidental rental costs almost doubled
as against the previous year as a result of the absorption of
BONITA stores in the Group and further expansion. The higher
costs for order picking and costs for the fulfilment provider,
which handles the online business, also led to an increase in
operating and other expenses. Expenses rose in line with the
positive revenue trend.
90
(8) INCOME TA XE s
Deferred taxes relating to the origination and reversal of tem-
Income taxes are primarily composed of the following items:
porary differences are attributable to differences between
the carrying amounts of assets and liabilities in the consolidated balance sheet and their tax base, as well as consolidation
Tax Expenses
adjustments.
2013
2012
–5,359
–7,477
306
352
lion (2012: EUR 58.4 million). No deferred tax assets were
–5,053
–7,125
recognised for tax loss carryforwards in the amount of
EUR thousand
Current taxes
Current income taxes for the financial year
As at the reporting date, the Group’s total tax loss carryfor-
Prior-period adjustments
Deferred taxes
wards and interest carried forward amounted to EUR 59.7 mil-
EUR 14.3 million (2012: EUR7.3 million) because it will not be
possible to offset them against future taxable profit.
Utilisation of loss carryforwards/
interest carried forward
–760
9,359
Origination and reversal of temporary
differences
1,695
689
Tax effect of costs of raising equity capital
recognised in equity
–279
–253
656
9,795
Tax Reconciliation
–4,397
2,670
EUR thousand
The reconciliation from expected to reported tax expense
is presented in the following:
Net income before income tax
In financial year 2012, deferred tax assets totalling EUR8.5 mil-
Average composite tax rate
lion were recognised in respect of cumulative interest carried
Expected income tax expense
2013
2012
–11,844
436
30.6%
30.5%
3,624
–133
forward (EUR 31.6 million) due to the probability that they
can be offset against future taxable profit. The interest carried
Reconciliation
forward arose as a result of the earnings stripping rule, which
Effects of tax rate differences
1,858
–185
limits the deductibility of interest expenses to a maximum of
Non-recognition of deferred tax assets
–5,459
–
30% of taxable profit before interest, taxes, depreciation and
Other tax effects from differences in the basis
of tax assessment
–1,780
2,089
Usable other loss carryforwards
–2,663
34
240
352
amortisation.
In the reporting period, the interest carried forward and the
Prior-period effects
interest expenses from the financial year could not be utilised
Permanent differences
for tax purposes, or only in part. Cumulative interest-related
Other effects
carryforwards therefore amounted to EUR 27.7 million at the
Reported income tax income/expense
end of 2013. Deferred tax assets recognised for these carry-
Effective tax rate
–
530
–217
–16
–4,397
2,670
–37%
–612%
forwards now amount to EUR 5.6 million. In addition, deferred
tax assets totalling EUR7.6 million were recognised for cor
Deferred taxes were calculated on the basis of a uniform tax
poration and trade tax loss carryforwards of EUR 27.9 million
rate of 30.6% (2012: 30.5%) for reasons of simplification.
and EUR 21.9 million respectively due to the probability that
Please refer to our disclosures in section “Accounting Policies
they can be offset against future taxable profit.
and Consolidation Methods” for information on how the tax
rate is calculated.
The deferred tax assets of EUR0.6 million recognised for tax
loss carryforwards relating to TOM TAILOR FRANCE SARL that
The non-recognition of deferred tax assets is mainly due to loss
can be carried forward for an indefinite period were reversed
carryforwards of foreign subsidiaries for which no deferred
in financial year 2013 due to the company’s ongoing losses.
taxes were recognised.
91
The effects from interest and losses carried forward are
The vesting conditions for the stock options were not met at
primarily attributable to interest carried forward that could
31 December 2013, so there were no outstanding shares that
not be utilised.
could dilute earnings. Diluted earnings per share are therefore
identical to basic earnings per share.
Effects of tax rate differences are attributable to differences
between the trade tax multiplier used to calculate deferred
Earnings per share and the weighted average number of
taxes and the actual composite trade tax multiplier, as well as
ordinary shares used to calculate earnings per share are
to different national tax rates for companies in the Group.
presented in the table below.
Tax effects from differences in the basis of tax assessment
are mainly due to expenses that are not deductible for tax
Earnings per Share
31/12/2013
purposes and to trade tax add-backs.
Total shares as at the reporting date
The prior-period adjustments are attributable to additional
tax payments and refunds for past years.
(9) EA RNING S PE R SHA RE
31/12/2012
26,027,133 24,209,035
2013
2012
–21,255
288
24,553
19,861
Share of consolidated net income attributable
to shareholders of the parent
(EUR thousand)
Earnings per share are calculated in accordance with IAS 33 by
Weighted average number of ordinary shares
dividing the consolidated net income attributable to share-
(thousands of shares)
holders of TOM TAILOR Holding AG by the weighted average
Basic earnings per share (EUR)
–0.87
0.01
number of shares outstanding in the reporting period based
Diluted earnings per share (EUR)
–0.87
0.01
on the assumption that all option rights with a potentially dilutive effect will be exercised. Shares with a potentially dilutive
effect are taken into account in the calculation of diluted earn-
registered shares on 24 October 2013 as part of a cash
ings per share if the vesting conditions of the stock option
capital increase from authorised capital. Following the cash
programme are fully met at the reporting date. Please refer to
capital increase, there were a total of 26,027,133 no-par-
the disclosures under note 18 “Stock Option Programme”.
value shares.
92
BALANCE SHEET
DISCLOSURES
which is determined on the basis of the net selling price
(fair value less costs to sell), with the carrying amount
in each case. In the absence of an active market, the net
selling price was calculated using the discounted cash
(10) INTA NG IB LE A SS E T S
flow (DCF) method.
Intangible assets are composed of the following items:
Intangible assets are allocated to the respective cash-generating units and tested for impairment at this level.
Intangible Assets
EUR thousand
The TOM TAILOR GROUP’s cash-generating units are the
31/12/2013
31/12/2012
TOM TAILOR wholesale and TOM TAILOR retail segments,
as in the previous year, plus BONITA.
Hidden reserves identified in the course
of initial consolidation
249,953
249,953
Customer bases
22,517
25,274
is allocated to the TOM TAILOR wholesale segment in
Beneficial leases
16,022
18,663
connection with impairment testing, EUR 17.4 million (2012:
Brands
EUR44.8 million (2012: EUR44.8 million) of the brands item
13,080
15,777
EUR 17.4 million) to the TOM TAILOR retail segment and
301,572
309,667
EUR 187.7 million (2012: EUR 187.7 million) to the BONITA
Key money/store subsidies
5,981
10,482
relates to the TOM TAILOR wholesale segment and
Other rights of use
7,482
12,041
EUR 6.3 million (2012: EUR4.9 million) to the TOM TAILOR
10,625
10,388
retail segment.
24,088
32,911
271
261
325,931
342,839
Licensing agreements and similar rights
Other
Software
Software leased under finance leases
segment. EUR4.9 million (2012: EUR4.9 million) of goodwill
Impairment testing is based on corporate planning, with a
detailed three-year planning period followed by a perpetual
Goodwill
annuity, and thus Level 3 fair value measurement in accord-
arising from the acquisition of a
non-controlling interest in
TOM TAILOR Gesellschaft m.b.H., Wörgl
ance with IFRS 13.
3,361
3,361
To calculate fair value less costs to sell, cash flows for the
arising from the initial consolidation of
Tom Tailor GmbH by
TOM TAILOR Holding GmbH
2,291
2,291
TOM TAILOR South Eastern Europe Holding
GmbH, Wörgl
2,025
2,025
TOM TAILOR Retail Joint Venture GmbH,
Bregenz
S.C. TOM TAILOR Retail RO SRL,
Bucharest
current operating results, management’s best estimates of
future performance and market assumptions. The parameters
used in the measurement may differ from year to year due
to inputs that are specific to the reporting date (e.g. interest
2,152
2,152
1,408
–
11,237
9,829
108
97
337,276
352,765
Prepayments
Licences
next three years are forecast on the basis of past experience,
rates, beta factors) and knowledge gained in relation to future
developments.
Fair value is calculated on the assumption of sustained revenue
growth in the detailed planning period. Risk allowances for
regional factors and Company-specific market share trends
are applied to revenue in some cases.
Cash flow is extrapolated using a growth rate of 1% (2012:
There were no impaired intangible assets.
1%) for the perpetual annuity. The costs to sell were recognised at 1% of the enterprise value. The cost of capital used to
Brands and goodwill are not amortised as there are no
discount future cash flows (weighted average cost of
corresponding indicators. Brands, as significant intangible
capital, WACC) is calculated on the basis of market data. As at
assets, and existing goodwill were tested for impairment
31 December 2013, the WACC before taxes for the brands
at the reporting date by comparing the recoverable amount,
was between 9.3% and 9.9% (2012: 9.6% and 10.4%), while the
93
WACC after taxes was between 6.5% and 7.2 % (2012: 6.9 %
Customer bases, which relate to recurring customers
and 7.0%). The adjustment of measurement parameters does
(useful life of 17 years), franchise partners, shop-in-shop
not lead to the adjustment of carrying amounts.
customers and multi-label customers (each with a useful life of six years), beneficial leases (useful life of five
Impairment testing did not lead to any impairment losses.
years) and licensing agreements (useful life of 14 years) are
Given the planned expansion, the recoverable amount clearly
amortised over their useful life. There were no indications
exceeds the carrying amount of the cash generating unit;
of impairment (triggering events) to these intangible assets
consequently, minor adjustments to the parameters used
as at the reporting date.
(e.g. adjustments of 100 basis points to the WACC) would
not result in any impairment losses.
Intangible assets changed as follows in 2013:
Changes in Intangible Assets in 2013
EUR thousand
Brands
Goodwill
Customer
bases
Licensing
agreements
and similar
rights
Beneficial
leases
Other
Prepayments
Total
Cost
249,953
10,100
67,074
32,596
20,359
85,168
97
465,347
Foreign exchange differences
–
–
–
–
–
–57
–
–57
–
1,408
–
–
1,635
1,676
–
4,719
Additions
–
–
–
–
–
5,105
183
5,288
Reclassifications
–
–
–
–
–
172
–172
–
Disposals
–
–
–
–
–
–14,626
–
–14,626
249,953
11,508
67,074
32,596
21,994
77,437
108
460,671
–
271
41,800
16,819
1,696
51,996
–
112,582
–
–
–
–
–
–33
–
–33
–
–
–
–
–
862
–
862
Additions
–
–
2,757
2,697
4,276
15,462
–
25,192
Reclassifications
–
–
–
–
–
–
–
–
Amortisation and impairment losses
Disposals
–
–
–
–
–
–15,208
–
–15,208
–
271
44,557
19,516
5,972
53,079
–
123,395
Carrying amount
249,953
9,829
25,274
15,777
18,663
33,172
97
352,765
249,953
11,237
22,517
13,080
16,022
24,358
108
337,276
of which leased
Additions from the change in the basis of consolidation were
attributable to the acquisition of shares in S.C. TOM TAILOR
RETAIL RO SRL, Bucharest, Romania, and BONITA Österreich
Handels GmbH, Salzburg, Austria. Please refer to our disclos
ures on the change in the basis of consolidation.
271
94
Customer bases changed as follows in 2013:
Changes in Capitalised Customer Bases 2013
Recurring
customers
Franchise
partners
SIS
customers
Multi-label
customers
Total
customer
bases
46,873
1,705
8,498
9,998
67,074
46,873
1,705
8,498
9,998
67,074
21,599
1,705
8,498
9,998
41,800
2,757
–
–
–
2,757
24,356
1,705
8,498
9,998
44,557
25,274
–
–
–
25,274
22,517
–
–
–
22,517
Licensing
agreements
and similar
rights
Beneficial
leases
Other
EUR thousand
Cost
Additions
Carrying amount
Intangible assets changed as follows in financial year 2012:
Changes in Intangible Assets in 2012
Brands
Goodwill
Customer
bases
62,221
9,053
67,074
32,696
–
50,558
–
–
–
–
–
–
–17
–
–17
187,732
1,047
–
–
20,359
33,280
–
242,418
Additions
–
–
–
–
–
9,219
97
9,316
Reclassifications
–
–
–
–
–
2
–
2
Disposals
–
–
–
–
–
–7,874
–
–7,874
249,953
10,100
67,074
32,596
20,359
85,168
97
465,347
–
–
39,043
14,122
–
29,505
–
82,670
–
–
–
–
–
6
–
6
–
271
–
–
–
19,339
–
19,610
Additions
–
–
2,757
2,697
1,696
11,000
–
18,150
Reclassifications
–
–
–
–
–
1
–
1
EUR thousand
Prepayments
Total
Cost
221,502
Disposals
–
–
–
–
–
–7,855
–
–7,855
–
271
41,800
16,819
1,696
51,996
–
112,582
62,221
9,053
28,031
18,474
–
21,053
–
138,832
249,983
9,829
25,274
15,777
18,663
33,172
97
352,765
Carrying amount
of which leased
261
95
Customer bases changed as follows in 2012:
Changes in Capitalised Customer Bases 2012
Total
customer
bases
Recurring
customers
Franchise
partners
SIS
customers
Multi-label
customers
46,873
1,705
8,498
9,998
67,074
46,873
1,705
8,498
9,998
67,074
18,842
1,705
8,498
9,998
39,043
2,757
–
–
–
2,757
21,599
1,705
8,498
9,998
41,800
28,031
–
–
–
28,031
25,274
–
–
–
25,274
EUR thousand
Cost
Additions
Carrying amount
96
(11) PROPE R T Y, PL A NT A ND EQU IPME NT
Property, plant and equipment mainly comprises shop
fittings and fixtures as well as operating and office equipment.
Property, plant and equipment changed as follows:
Changes in Property, Plant and Equipment in 2013
EUR thousand
Land and
buildings,
including
buildings on
third-party
land
Other
equipment,
operating
and office
equipment
50,279
268,787
331
319,397
–21
–136
–1
–158
–
758
36
794
331
28,959
1,081
30,371
70
748
–818
–
–437
–6,384
–
–6,821
50,222
292,732
629
343,583
14,997
140,900
–
155,897
–7
–54
–
–61
Prepayments
Total
Cost
Additions
Reclassifications
Disposals
Depreciation and impairment losses
Additions
Reclassifications
Disposals
–
196
–
196
2,485
29,997
–
32,482
–
–
–
–
–104
–4,460
–
–4,564
17,371
166,579
–
183,950
Carrying amount
35,282
127,887
331
163,500
32,851
126,153
629
159,633
of which leased
18,765
97
Changes in Property, Plant and Equipment in 2012
Land and
buildings,
including
buildings on
third-party
land
Other
equipment,
operating
and office
equipment
4,340
88,364
133
–23
11
–
–12
47,973
156,060
72
204,105
1,148
30,507
1,092
32,747
225
739
–966
–2
Disposals
–3,384
–6,894
–
–10,278
50,279
268,787
331
319,397
643
42,595
21
43,259
–3
–72
–
–75
13,798
84,937
–
98,735
1,343
19,295
1
20,639
–
22
–22
–
–784
–5,877
–
–6,661
14,997
140,900
–
155,897
3,697
45,769
112
49,578
35,282
127,887
331
163,500
EUR thousand
Prepayments
Total
Cost
Additions
Reclassifications
92,837
Depreciation and impairment losses
Additions
Reclassifications
Disposals
Carrying amount
16,092
of which leased
In 2013, additions related largely to shop fittings and fix-
No impairment losses or reversals of impairment losses
tures for new retail and outlet stores opened in the reporting
were recognised in respect of property, plant and equipment
period.
in the reporting period or in the previous year.
Property, plant and equipment also includes leased operating
Please refer to section 23 “Disclosures on Collateral” for
and office equipment; most of the leases have a remaining
information on the provision of items of property, plant and
term of up to five years.
equipment as collateral.
98
Further information on minimum lease payments for leases
able to the Group (EUR249 thousand) exceeded the carrying
classified as finance leases (including leases for non-current
amount of the equity interest, the share of losses was only
intangible assets) is presented in the following:
recognised in the Group up to the carrying amount of the
equity interest (EUR0 thousand). The cumulative share of
Future Minimum Lease Payments for Finance Leases
EUR thousand
31/12/2013
31/12/2012
losses (EUR 1,561 thousand) was thus not included in the
consolidated financial statements. The financial statements
for financial year 2013 are not yet available.
Minimum lease payments
Up to 1 year
5,506
5,168
1 to 5 years
12,961
11,871
31 December 2012, TT OFF SALE (NI) LTD. reported non-cur-
18,467
17,039
rent assets in the amount of GBP502 thousand (correspond-
Up to 1 year
1,028
1,054
GBP909 thousand (corresponding to EUR 1,114 thousand), cur-
1 to 5 years
1,244
1,428
rent liabilities in the amount of GBP3,994 thousand (corres
2,272
2,482
ponding to EUR4,898 thousand) and equity in the amount of
4,478
4,115
Interest component
ing to EUR615 thousand), current assets in the amount of
Present value of minimum lease payments
Up to 1 year
1 to 5 years
In its annual financial statements for the year ended
GBP–2,584 thousand (corresponding to EUR –3,168 thousand).
11,717
10,443
Tom Tailor GmbH supplied TT OFF SALE (NI) LTD. with mer-
16,195
14,558
chandise valued at EUR905 thousand in the reporting
period (2012: EUR 1,584 thousand). The gross profit generated
None of these leases can be cancelled before the end of their
from this delivered merchandise was reversed in the con
contractual term.
solidated financial statements of TOM TAILOR Holding AG to
the extent that TT OFF SALE (NI) LTD. had not resold it to
Operating Leasing
third parties by the reporting date. It was charged to trade
In addition to finance leases, leases and rental agreements
receivables because the carrying amount of the equity
were entered into that must be classified as operating leases
interest was not sufficient to eliminate these intercompany
in accordance with IAS 17 on the basis of their economic sub-
profits. Revenue was reduced by the same amount.
stance; this means that the leased asset concerned is allocated
Deferred tax assets were recognised in respect of the con
to the lessor. These primarily relate to rental agreements
solidation adjustment.
for properties used for the Group’s retail activities, as well as
for office space used by Group companies and parts of the
TT OFF SALE (Ireland) LTD., Dublin/Ireland, was formed in 2009.
vehicle fleet.
Tom Tailor GmbH holds 49.0% of the shares in the company
indirectly via TT OFF SALE (NI) LTD. The financial statements
(12) IN V E S TME NT S ECU R ITIE S
for financial year 2013 are not yet available.
TT OFF SALE (NI) LTD., Belfast/United Kingdom, was formed
in financial year 2008. As a founding shareholder, Tom Tailor
According to the company’s annual financial statements,
GmbH holds 49.0 % of the shares in TT OFF SALE (NI) LTD. The
it recorded revenue of EUR 1,487 thousand and a net loss for
interest is included in the consolidated financial statements
the year of EUR 118 thousand in financial year 2012. TT OFF
using the equity method.
SALE (Ireland) LTD. has non-current assets in the amount of
EUR98 thousand, current assets in the amount of EUR694 The contribution was paid in cash and amounted to GBP 100
thousand and current liabilities in the amount of EUR 1,003 (corresponding to EUR 104). In 2012, the company recorded
thousand. The prior-year results and the net loss for the year
revenue of GBP 675 thousand (corresponding to EUR832 thou-
led to negative equity of EUR 211 thousand.
sand) and a net loss for the year of GBP412 thousand (corres
ponding to EUR 508 thousand). As the share of losses attribut-
There is no existing fair value for the equity interest.
99
(13) OTHE R CU RRE NT A SS E T S
The carrying amount of inventories, which were recognised
Other assets are composed of the following items:
at the lower of purchase costs and net realisable value,
amounted to EUR 6,516 thousand as at the reporting date
(2012: EUR6,108 thousand). These include goods in transit in
Other Assets
the amount of EUR 33,463 thousand (2012: EUR 23,099 thou31/12/2013
31/12/2012
Creditors with debit accounts
7,359
3,937
increase in the number of controlled selling spaces and the
Security deposits
4,622
2,099
positive revenue trend. The expansion in the retail segment
Store subsidies
4,616
4,688
in particular led to a corresponding increase in inventories.
Receivables from online business
4,199
4,495
Procurement agent commissions
1,582
2,580
The inventories recognised in the cost of materials in finan-
Prepaid rent
915
2,020
cial year 2013 amounted to EUR408,265 thousand (2012:
VAT receivables
248
967
4,419
2,859
27,960
23,645
of which non-current
10,434
8,369
of which current
17,256
15,276
EUR thousand
Other assets
sand). The increase in inventories was primarily due to the
EUR 296,546 thousand).
(15) TR A DE RECE I VA B LE S
Trade Receivables
Other assets include receivables from online business with a
EUR thousand
carrying amount of EUR4,199 thousand (2012: EUR4,495 thou-
Trade receivables
sand). These receivables are not reported as receivables from
Receivables from associate
end customers, but as receivables from the service provider
31/12/2013
31/12/2012
47,945
49,845
–
2,072
47,945
51,917
concerned due to contractual arrangements. The contractual right to receive the cash flows from the financial asset
As in the previous year, trade receivables are due within one
was transferred to the service provider, who is responsible
year. Their carrying amount corresponds to their fair value.
for collecting the receivable and bears the full customer
credit risk.
At EUR 2,072 thousand, the decline in receivables from asso
ciate is mainly due to impairment losses on receivables from
(14) IN V E NTOR IE S
TT OFF SALE (NI) LTD., Belfast, United Kingdom.
Inventories are composed of the following items:
Changes to valuation allowances on current receivables within
financial assets measured at (amortised) cost are presented
Inventories
EUR thousand
Raw materials, consumables and supplies
Merchandise
in the following table:
31/12/2013
31/12/2012
3,601
2,928
134,208
120,809
Valuation Allowances on Current Receivables
137,809
123,737
EUR thousand
2013
2012
Balance at 1 January
5,619
3,632
Write-downs to the lower net realisable value rose by
Additions recognised in profit or loss
2,454
2,573
EUR 1,273 thousand compared with the previous year (2012:
Utilisation
–657
–511
increase of EUR828 thousand). The change was recognised
Reversals
in the cost of materials item in profit or loss. This included ex-
Balance at 31 December
pected costs to sell that are still to be incurred. Write-downs
reversed to profit or loss were recognised in connection with
disposals of an immaterial amount.
–9
–75
7,407
5,619
100
The receivables presented above include amounts that were
(17) EQU IT Y
past due at the reporting date, but for which the Group
Changes in equity are presented in the statement of changes
has not recognised any impairment losses (see age structure
in equity.
analysis). This is because there were no material changes to
customer credit quality and the outstanding amounts are still
TOM TAILOR Holding AG issued 1,818,098 new no-par-value
deemed to be collectible. This assessment is based on the
registered shares on 24 October 2013 as part of a cash capital
collateral, instalment agreements and documents on financial
increase. The new shares were issued at a price of EUR 16.25
position available to the Group in most cases, as well as its
per share under the terms of a private placement for institu-
right of set-off against the counterparty.
tional investors using an accelerated bookbuilding procedure. The Company generated gross issue proceeds of approxi-
The age structure of trade receivables as at 31 December
mately EUR 29.5 million.
is as follows:
The 1,818,098 new registered shares were issued by way of a
capital increase from authorised capital. The implementation
Age Structure of Trade Receivables
of the capital increase was entered in the commercial register
31/12/2013
31/12/2012
35,489
37,967
2,685
4,592
uary 2013.
< 30 days
4,889
5,035
The Company’s subscribed capital after the cash capital
30–90 days
3,196
2,301
increase amounts to a total of EUR26,027,133 and is composed
> 90 days
1,686
2,022
of 26,027,133 no-par-value shares.
47,945
51,917
EUR thousand
Neither due nor impaired
Carrying amount of receivables impaired
on 24 October 2013. Shareholders’ pre-emptive rights were
disapplied. The new shares bear dividend rights as from 1 Jan-
Past due but not impaired
The capital reserves contain the additional payments by the
Impairment testing of trade receivables takes into account all
shareholders as well as the amounts in excess of the notional
changes to credit quality since payment terms were granted
interest in the share capital received on issuance of the
until the reporting date. Supplier credits granted to customers
shares. After adjustment for the issuing costs attributable to
are classified as not due. The broad customer base meant
TOM TAILOR Holding AG (adjusted for the income tax benefit)
that there was no significant credit risk concentration as at
in the amount of EUR0.6 million, which are recognised directly
the reporting date.
in equity, total capital reserves rose by EUR 27.1 million.
Expenses relating to losses on receivables and valuation
The EUR 5.0 million cost of increasing the equity interest
allowances on receivables totalled EUR 3,873 thousand (2012:
in TOM TAILOR South Eastern Europe Holding GmbH, Wörgl/
Austria, by 24 percentage points to 75% was offset in the
amount of EUR 1.6 million by the corresponding non-control-
(16) C A S H A ND C A S H EQU I VA LE NT S
ling interest. The remainder of the purchase price (EUR3.4 million) was charged to capital reserves.
Cash and Cash Equivalents
EUR thousand
Overnight funds and other bank deposits
Cash-in-hand
Accumulated other comprehensive income includes the
31/12/2013
31/12/2012
42,633
47,396
4,496
5,986
47,129
53,382
reserve for currency translation differences and the hedge
reserve after adjustment for tax effects.
The foreign currency derivatives recognised in equity at their
fair value in 2012 (a total of EUR –4.9 million), net of the related
deferred taxes (EUR 1.4 million), were reclassified in their
entirety to net income for the period in 2013 because the underlying hedged items were recognised in the income statement. The Group bought new foreign currency derivatives in
101
the reporting period as part of its hedging strategy. In this
In addition, the Management Board is authorised to increase
context, a total of EUR8.3 million was appropriated to the
hedge reserve. Deferred taxes on the measurement of deriva-
tive financial instruments amounted to EUR2.5 million. After
2 June 2018 by up to a total of EUR4,841,807.00 by issuing new
adjustment for deferred taxes and the amount recognised in
no-par-value registered shares against cash and/or non-cash
net income for the period, the hedge reserve amounted to
contributions (Authorised Capital 2013 II).
EUR –5.8 million as at 31 December 2013 (31 December 2012:
The Company’s share capital has been contingently increased
EUR –3.5 million).
by up to EUR2,400,000 by issuing no-par-value registered shares
(Contingent Capital 2013). The purpose of the contingent
Consolidated net accumulated losses changed as follows:
capital is to grant shares to the holders of stock option rights
under the Long-Term Stock Option Programme. Overall,
Accumulated Loss (Development)
EUR thousand
1 January
Distribution
Consolidated net income attributable to
shareholders of TOM TAILOR Holding AG
Less non-controlling interests
After non-controlling interests
31 December
2,400,000 stock option rights can therefore be granted. A total
2013
2012
of up to 1,200,000 stock option rights can be granted to mem-
–80,345
–95,793
bers of the Company’s Management Board, up to 600,000 to
–
–2,810
–16,241
3,106
companies. The stock option rights may be issued in four
5,014
–2,818
yearly tranches of up to 600,000 stock option rights each.
–21,255
288
–
17,970
–101,600
–80,345
members of the management of affiliated companies, and
up to 600,000 to employees of the Company and of affiliated
During the reporting period, a total of 485,000 of the available
600,000 stock options were issued on 26 August 2013.
(18) S TO CK OP TION PRO G R A MME
The foreign currency translation reserve includes exchange
rate gains or losses from the translation of the financial
Holding AG resolved a Company stock option programme in
statements of the consolidated foreign subsidiaries whose
order to be able to grant stock option rights to members of
functional currency is not the euro.
the Company’s Management Board, members of the management of affiliated companies and selected employees below
The Extraordinary General Meeting on 24 March 2010 author-
Management Board level of the Company and below manage-
ised the Management Board to increase the Company’s
ment level of affiliated companies (hereinafter referred to
share capital, with the consent of the Supervisory Board, on
as the Long-Term Stock Option Programme). The associated
one or more occasions until 24 March 2015 by up to a total
performance targets are measured on the basis of a multi-
of EUR8,264,084.00 by issuing new no-par-value registered
year assessment and comply with the legal requirements of
shares against cash and/or non-cash contributions (Author-
the Aktiengesetz (AktG – German Stock Corporation Act) and
ised Capital I). EUR7,680,866.00 of the authorised limit was
the German Corporate Governance Code.
used for the cash and non-cash capital increase in the previous year in connection with the acquisition of the BONITA
For the purposes of granting shares to the holders of stock
Group.
option rights under the Long-Term Stock Option Programme,
the Annual General Meeting also resolved to contingently
At the Annual General Meeting on 3 June 2013, the Manage-
increase share capital by up to EUR2,400,000.00 by issuing up
ment Board’s authorisation to increase the authorised capital
to 2,400,000 no-par-value registered shares in the Company.
by the remaining amount of up to EUR 583,218.00 was with-
Overall, 2,400,000 stock option rights can therefore be granted.
drawn and replaced as follows. The Management Board is now
A total of up to 1,200,000 stock option rights can be granted to
authorised to increase the Company’s share capital in full
members of the Company’s Management Board, up to 600,000
or in part, with the consent of the Supervisory Board, on one
to members of the management of affiliated companies, and
or more occasions until 2 June 2018 by up to a total of
up to 600,000 to employees of the Company and of affiliated
EUR7,262,710.00 by issuing new no-par-value registered shares
companies. The stock option rights may be issued in four yearly
against cash contributions (Authorised Capital 2013 I).
tranches of up to 600,000 stock option rights each.
102
In the four issuing periods, the option beneficiaries will receive
During the reporting period, the expense for share-based
stock option rights with two different strike prices. For 75%
payments to members of the Company’s Management Board,
of the issued stock option rights (type A stock option rights),
members of the management of affiliated companies and
the strike price corresponds to the issue price; for the remain-
selected employees below Management Board level of the
ing 25%, the strike price of the stock option rights issued (type
Company and below management level of affiliated com
B stock option rights) corresponds to 120% of the issue price.
panies amounted to EUR 122 thousand.
The stock option rights may be exercised no earlier than four
(19) DI V IDE ND PE R S H A RE
years after the date of issue (vesting period). The stock option
The new syndicated loan agreement entered into in con-
rights have a maximum term of seven years from the date
nection with the acquisition of BONITA in 2012 provides
of issue. The stock option rights may only be exercised if (1) the
for a restriction on future dividend payments in order to
closing price of the shares on the last five trading days of
protect the consortium banks. Under the agreement,
the vesting period exceeds the issue price by an average of at
dividends may only be paid if the equity ratio at Group level
least 35%, whereby the issue price shall correspond to the
amounts to at least 30 %. In addition, the size of the divi-
average closing price of the shares on the last 30 trading days
dend depends on net debt and EBITDA. A maximum of 30 %
before the date of issue of the respective stock option right,
of the consolidated net income for the period may be
and (2) diluted consolidated earnings per share (EPS) adjusted
distributed for as long as the ratio of net debt to EBITDA
for special factors for the financial year ending prior to the
exceeds 2.5. The loan agreement provides for a maximum
end of the respective vesting period have increased by at
potential dividend of 50 % if the ratio of net debt to EBITDA
least 50% compared with the EPS for the financial year ending
is less than 2.0.
prior to the issue of the respective stock option rights.
The gain achieved by the option beneficiaries when exercising
(20) PROV I SION S FOR PE N SION S
their options may not exceed three times the issue price (cap).
Provisions for pensions are recognised for obligations arising
from pension entitlements. The beneficiaries are former
If the cap is exceeded, the strike price of the relevant option
senior executives and former managing directors/Management
type will be adjusted in such a way that the difference
Board members and their surviving dependants.
between the market price on exercise and the adjusted strike
price does not exceed three times the issue price.
Pension provisions relate solely to defined benefit plans.
Pension plans are funded by provisions and are thus unfunded.
During the reporting period, a total of 485,000 of the available
Pension commitments are covered by pension liability insur-
600,000 stock options were issued on 26 August 2013. The
ance policies.
remaining 115,000 stock options available for this first tranche
were not issued. None of the stock options are exercisable
Pension obligations (present value of the defined benefit
yet due to the vesting period. The strike price of the 485,000
obligation) are calculated using actuarial techniques,
stock options granted in the reporting period is EUR 16.30
which require estimates to be made. These are based on the
(type A) and EUR 19.56 (type B).
following assumptions:
The fair value of the stock options was determined using the
Black-Scholes method. The fair value per share for the
Assumptions
type A and type B stock option rights is EUR 3.39 and EUR 2.77,
%
2013
2012
respectively. The 250-day historical volatility was 30%, the
Discount rate
3.60
3.80
expected dividend was 1.83 % and the risk-free interest rate
was 1.77 %. The share price on the issue date was EUR 16.30
As in the previous year, pension and pay trends are set at 0.0%
and the share price hurdle is therefore EUR 22.00 (+35%). The
and do not affect future pension payments because pension
pay-out is capped at 400 % for type A stock option rights
commitments only relate to fixed amounts. This is based on a
and 420 % for type B stock option rights. On average, it was
fluctuation of 0.0 %, as in the previous year, since some of
assumed that the options would be exercised after a period
the beneficiaries are no longer actively employed. The average
of 5.5 years. A fluctuation of 3% p.a. was assumed.
expected return on plan assets is approximately 4% (2012: 7%).
103
Pension commitments are measured using biometric param
The present value of the defined benefit obligation used in
eters, which are based on the 2005 mortality tables published
this sensitivity analysis was determined using the projected
by Prof. Dr Heubeck.
unit credit method.
Actuarial gains and losses may arise from increases or de-
The capitalised surrender value of the pension liability insur-
creases in either the present value of the defined benefit obli-
ance, which is offset against the present value of the defined
gation or the market value of pension liability insurance.
benefit obligation, changed as follows:
Among other things, these may be caused by changes to the
calculation parameters, changes in estimates relating to
Pension Provisions: Change in Capitalised Surrender
Value of Pension Liability Insurance
pension obligation risk and differences between actual and
expected income from the insurance policy.
EUR thousand
Taking into account the basis of calculation in accordance
Capitalised surrender value of pension
liability insurance as at 1 January
with IAS 19, the funded status of pension commitments is as
follows:
31/12/2013
31/12/2012
1,642
1,533
–1,023
–1,022
Net obligations
619
511
Carrying amount
619
511
Present value of defined benefit obligation
(funded by provisions only)
Less pension liability insurance
2012
1,022
1,369
46
53
Contributions to capitalised surrender value
of pension liability insurance
Pension Provisions
EUR thousand
2013
Gains on capitalised surrender value of
pension liability insurance
6
1
Payment of pension claims
–
–768
–51
367
1,023
1,022
Other changes
Capitalised surrender value of pension
liability insurance as at 31 December
According to the insurer, the fair value of the pension liability
insurance was EUR 1,154 thousand as at the reporting
The present value of defined benefit obligations changed
date (2012: EUR 1,101 thousand). EUR 131 thousand (2012:
as follows:
EUR79 thousand) was not offset as at the reporting date
due to the cap on offsetting the capitalised surrender value
of the pension liability insurance up to the present value of
Pension Provisions: Change in Present Value
of Defined Benefit Obligation
pension commitments.
2013
2012
1,533
1,650
Service cost
26
21
of the defined benefit obligation or the market value of the
Interest cost
58
89
pension liability insurance have been recognised in other com-
–10
–
34
541
–
–
–
–768
components are reported in personnel expenses.
1,642
1,533
Plan assets are measured on the basis of an expected return
EUR thousand
as at 1 January
are reported in the financial result. The actuarial gains and
Actuarial gains and losses
from experience adjustments
from changes in financial assumptions
from changes in demographic assumptions
Payment of pension claims
as at 31 December
Expenses from the unwinding of discounted pension provisions
losses arising from increases or decreases in the present value
prehensive income from the beginning of financial year 2013.
Previous years have not been retrospectively adjusted with
regard to the recognition of actuarial gains and losses as the
amounts involved are not material. All other pension expense
corresponding to the discount rate on the pension obligations.
A 0.25 percentage point increase or decrease in the discount
rate would lead to a EUR43 thousand rise or EUR 44 thousand
reduction in pension obligations, respectively. All other assumptions used in the sensitivity analysis remained unchanged.
104
The amounts of the defined benefit obligation and the plan
assets for the past financial year and the preceding four reporting periods are as follows:
Historical Information
2013
EUR thousand
2012
2011
2010
2009
1,642
1,533
1,650
1,550
1,376
–1,023
–1,022
-1,369
–1,295
–1,200
619
511
281
255
176
Customer
bonuses
Returns
Outstanding
invoices
Restoration
obligations
Fair value of plan assets
Plan deficit
(21) OTHE R PROV I SION S/CONTING E NT
LI A BILITIE S
Other provisions changed as follows:
Other Provisions 2013
Employeerelated
provisions
Other
Total
20,512
4,469
4,092
1,627
8,264
2,497
41,461
Additions
12,540
3,312
288
1,446
1,908
1,819
21,313
Reversals
12
–
–
–
–
127
139
–1,277
EUR thousand
–16
–
–
–
–1,261
–
Utilisation
17,016
89
680
1,627
6
2,002
21,420
16,008
7,692
3,700
1,446
8,905
2,187
39,938
13,759
7,692
3,700
1,446
381
2,187
29,165
2,249
–
–
–
8,524
–
10,773
Customer
bonuses
Returns
Outstanding
invoices
Restoration
obligations
Other
Total
Unwinding of discounts/changes in interest rates
Current
Non-current
Other Provisions 2012
EUR thousand
Employeerelated
provisions
5,970
3,244
3,168
1,246
100
1,980
15,708
Additions
13,568
4,469
3,680
1,627
–
1,167
24,529
Reversals
16
–
–
–
–
420
436
Unwinding of discounts/changes in interest rates
34
–
–
–
–168
–
–134
20,089
Changes in consolidated Group
8,097
–
1,032
–
8,621
2,339
Utilisation
7,159
3,244
3,788
1,246
289
2,569
18,295
20,512
4,469
4,092
1,627
8,264
2,497
41,461
16,633
4,469
4,092
1,627
298
2,497
29,616
3,879
–
–
–
7,966
–
11,845
Current
Non-current
105
Employee-related provisions largely relate to bonuses, the
provision at the start of the lease; the amount of the provision
long-term remuneration system for Management Board
is charged to other comprehensive income. The estimated
members and managers, and outstanding holiday and over-
expenses are recognised as non-current assets and amortised
time entitlements.
over the average term of the leases.
A long-term incentive programme (LTI) was introduced in
Provisions for customer bonuses comprise discounts that are
July 2010 for the TOM TAILOR GROUP’s management. It
conditional on order volumes and contractually agreed com-
serves to retain personnel and achieve the Company’s long-
mission entitlements that had not yet been paid out as at the
term goals. This remuneration system runs for a period of
reporting date.
eight years (starting in financial year 2010) and is based on a
comparison of target and actual revenue and the operating
Provisions for returns are based on past experience of return
result over a three-year observation period in each case. Any
rates and the time taken to receive them. Provisions are calcu-
bonus is granted in tranches every financial year on an indi-
lated on the basis of average margins and average return rates.
vidual basis. Together with revenue and the operating result,
share price performance is another component that is taken
Provisions are expected to be settled within 12 months, with
into consideration. The share price of the issued tranches was
the exception of part of the provision for the long-term
modelled at each reporting date using a Monte Carlo method,
incentive programme (LTI) for management and restoration
taking into account expected volatility (tranche 2: 41.54%;
obligations.
tranche 3: 41.17%; tranche 4: 29.77%), the risk-free interest rate
(tranche 2: 2.84%; tranche 3: 3.19 %; tranche 4: 0.01%), and
One Management Board member has a firm entitlement, if his
the expected dividend distribution (2.5%). The programme is
contract is terminated, to a severance payment in the amount
also open to the members of the Management Board.
of his fixed remuneration component for the remainder of
Tranche 1 under this remuneration system was paid out in
his contract.
2013. Tranche 2 and tranche 3 can first be paid out in 2014
and 2015 respectively.
There were no material contingent liabilities as at the reporting date.
Provisions for restoration obligations relate to the expected
expense of returning each store when the lease expires to its
Provisions for restoration obligations are uncertain with
structural condition at the time the lease was entered into.
regard to the timing of the outflow of resources, as they are
The present value of the expected expense is recognised as a
only incurred when the shop is restored.
106
(22) DE FE RRE D TA XE S
As at 31 December 2013, recognised deferred tax liabilities
Recognised deferred tax assets relate to the following items:
were attributable to the following recognition and measurement differences:
Deferred Tax Assets in the Reporting Period
31 December 2013
EUR thousand
Basis of
assessment
Tax loss carryforwards and interest
carried forward
45,432
13,900
Measurement of currency forwards
8,334
2,550
Consolidation adjustments
(consolidation of intercompany balances,
elimination of intercompany profits/losses)
Pension provisions
Restoration obligations
Set off against deferred tax liabilities
4,580
1,401
451
138
4,201
1,285
1,163
357
64,161
19,631
–64,161
–19,631
–
–
Other
Deferred Tax Liabilities in the Reporting Period
Deferred
tax assets
31 December 2013
EUR thousand
Basis of
assessment
Deferred
tax
liabilities
300,141
91,307
Treatment of transaction costs
4,153
1,271
Leases
2,558
743
599
173
Intangible assets
Measurement of receivables
Currency translation differences
2,084
638
Other
7,029
2,170
Set off against deferred tax assets
316,564
96,302
–64,161
–19,631
252,403
76,671
In the previous year, deferred tax liabilities in the amount of
Deferred tax assets relate primarily to the future usability of
EUR63.2 million were recognised as intangible assets in con-
cumulative interest carried forward, as well as corporation
nection with the recognition of intangible assets in the course
and trade tax loss carryforwards. This led to total deferred tax
of the initial consolidation of BONITA Deutschland Holding
assets of EUR 13.9 million.
GmbH (now: BONITA GmbH), Hamminkeln/Germany, and its
subsidiaries; these had a residual carrying amount of EUR 61.8
million as at the reporting date.
In addition to deferred tax assets in respect of tax loss carryforwards and interest carried forward, deferred tax assets
were recognised for measurement differences relating to cur-
As at 31 December 2012, recognised deferred tax liabilities
rency hedges and for consolidation adjustments. Deferred
were attributable to the following recognition and measure-
taxes attributable to currency forwards are reported in other
ment differences:
comprehensive income if they are part of an effective hedging
relationship.
Deferred Tax Liabilities in the Previous Year
31 December 2012
Deferred Tax Assets in the Previous Year
31 December 2012
EUR thousand
Tax loss carryforwards and interest
carried forward
Measurement of interest rate hedges
Consolidation adjustments
(consolidation of intercompany balances,
elimination of intercompany profits/losses)
Basis of
assessment
Deferred
tax assets
51,161
15,676
5,011
1,530
4,010
1,255
Pension provisions
362
111
Other
866
265
61,410
18,837
–61,410
–18,837
–
–
Set off against deferred tax liabilities
EUR thousand
Basis of
assessment
Deferred
tax
liabilities
311,540
94,626
Treatment of transaction costs
7,038
2,149
Leases
Intangible assets
1,117
326
Measurement of receivables
745
219
Other
497
152
320,937
97,472
–61,410
–18,837
259,527
78,635
Set off against deferred tax assets
107
(23) FIN A NCI A L LI A B ILITIE S
As was the case with the previous financing structure, con
Composition
tinued loan finance is dependent on compliance with certain
Current and non-current financial liabilities are composed
financial covenants (EBITDA/net interest income, net debt/
of the following items:
EBITDA and an equity ratio > 27.5%); these are to be calculated
on the basis of the consolidated financial statements prepared in accordance with International Financial Reporting
Financial Liabilities in the Reporting Period
Standards (IFRSs) as at each year-end.
31 December 2013
Up to 1 year
1 to 5 years
Over 5 years
Total
15,000
222,995
–
237,995
banks using the effective interest method and recognised in the
Lease liabilities
4,478
11,717
–
16,195
interest expense item in profit or loss over the term of the loan.
to third parties
7,000
4,434
–
11,434
26,478
239,146
–
265,624
EUR thousand
Liabilities
Bank commission of EUR0.6 million relating to the borrower’s
note loan has been amortised over the term of the liabilities to
to banks
The other bank lines of credit of EUR 365 million comprise a
current account overdraft facility of EUR 137.5 million,
In the previous year, current and non-current financial liabilities
a guaranteed line of credit of EUR 137.5 million and term loans
were composed of the following items:
of EUR90 million.
The variable effective interest rate for the lines drawn down
Financial Liabilities in the Previous Year
is based on three-month and six-month EURIBOR plus a margin
31 December 2012
Up to 1 year
1 to 5 years
Over 5 years
Total
90,000
191,409
–
281,409
Lease liabilities
4,115
10,443
–
14,558
to third parties
2,500
2,727
–
5,227
96,615
204,579
–
301,194
EUR thousand
Liabilities
to banks
that ultimately depends on the ratio of net debt to EBITDA.
The credit lines are available to the TOM TAILOR GROUP for
three years from the date they were granted in 2012 plus
two one-year extension options. A one-year extension option
is still available, so the bank lines of credit will expire in June
2016 if this option is exercised.
Disclosures
Bank commissions and transaction costs of EUR3.6 million
Liabilities to Banks
(2012: EUR7.0 million) relating to the finance are amortised
At the end of May 2013, TOM TAILOR Holding AG issued a
over the term of the liabilities to banks using the effective
borrower’s note loan of EUR80 million to refinance short-
interest method. The deferred commission will be recognised
term bank liabilities from the acquisition of the BONITA
in the interest expense item in profit or loss over the term
companies. The issue was placed mainly with institutional
of the loans.
investors (banks) in Germany and other European countries.
The borrower’s note loan has three tranches with maturities
The other loans, adjusted for the repayments in the amount
of 2.6, 3.6 and 5 years, and bears both fixed and variable
of EUR 22.5 million, fall due at the end of June 2015 unless
rates of interest. It matures no later than the end of May
a prolongation option has been exercised by then. At most,
2018, depending on the maturity of the individual tranches.
the prolongation options would result in repayments of
EUR 37.5 million and a maturity date of the end of June 2016.
The coupons reflect the present favourable level of
interest rates and are within the range of previously payable
Liabilities from overdraft facilities amounted to EUR72.1 million
interest rates.
as at the reporting date (2012: EUR 108.4 million).
108
In 2013, the variable effective interest rate for long-term
The purchase price of EUR3,886 thousand for 51% of the shares
loans was based on three-month EURIBOR plus a margin that
of TOM TAILOR Retail Joint Venture GmbH, Bregenz/Austria, is
depends on the ratio of net debt to EBITDA after adjustment
recognised in full under non-current financial liabilities in line
for one-off effects.
with the settlement date of the purchase price.
Continued loan finance is dependent on compliance with cer-
Non-current financial liabilities also include a provisional pur-
tain financial covenants (recurring EBITDA/net interest income
chase price liability of EUR 548 thousand for the acquisition of
affecting cash flow, net debt/recurring EBITDA, net debt
shares in S.C. TOM TAILOR RETAIL RO SRL, Bucharest/Romania.
(including future rent)/EBITDAR and the equity ratio); these are
to be calculated on the basis of the consolidated financial
(24) TR ADE PAYABLES
statements prepared in accordance with International Finan-
As in the previous year, trade payables are due without
cial Reporting Standards (IFRSs).
exception within one year. Their carrying amount corresponds
to their fair value.
The existing financial covenants were met in 2013.
Standard retention of title applies.
Disclosures on Collateral
Liabilities to banks (EUR 170 million) are collateralised by the
(25) OTHE R LI A BILITIE S
pledge of the shares in the following subsidiaries: Tom Tailor
Other liabilities are composed of the following items:
GmbH, Hamburg/Germany, Tom Tailor Retail GmbH, Hamburg/Germany, TOM TAILOR E-Commerce GmbH & Co. KG, Oststeinbek/Germany, TOM TAILOR Gesellschaft m.b.H., Wörgl/
Other Liabilities
31/12/2013
31/12/2012
11,531
9,563
Fair value of currency futures
8,334
5,011
KG, Oststeinbek, is liable for only EUR90 million. The right
Customer vouchers, prepayments and credits
5,539
5,517
to realise collateral can be asserted if there are grounds for
Fair value of interest rate hedges
2,616
3,340
termination in accordance with the existing syndicated loan
Employee-related liabilities and
social security contributions
Austria, TOM TAILOR Retail Gesellschaft m.b.H., Wörgl/Austria,
EUR thousand
BONITA GmbH, Hamminkeln/Germany, and GEWIB GmbH,
Other taxes (mainly VAT)
Hamminkeln/Germany. TOM TAILOR E-Commerce GmbH & Co. 1,887
2,064
Contributions
886
1,039
Liabilities to Third Parties
Supervisory Board remuneration
385
425
Liabilities to third parties include the present value (discounted
Debtors with credit balances
221
402
at a rate of 6.5%) of the purchase price obligation arising from
Logistics fee
–
1,446
the acquisition of the 51% interest in TOM TAILOR South Eastern
Europe Holding GmbH, Wörgl/Austria, in the amount of
Purchase price adjustment relating to
the acquisition of BONITA
–
1,284
EUR 2,000 thousand, which is payable within one year. In addi-
Other liabilities
tion to the remainder of the purchase price for the acquisition
Carrying amount
agreement.
of the 51% interest, current financial liabilities also include the
of which non-current
purchase price obligation of EUR 5,000 thousand to increase
of which current
2,065
1,387
33,464
31,478
4,342
5,000
29,122
26,478
the interest from 51% to 75%.
The customer vouchers and credits item relates to vouchers
issued to customers before the reporting date and approved
credits that were only redeemed after the reporting period.
109
MANAGEMENT
OF FINANCIAL RISK AND
F I N A N C I A L D E R I V AT I V E S
The Group’s ability to pay interest and principal is therefore
a key capital management tool.
Equity amounted to EUR 221,730 thousand (2012: EUR 218,966 thousand).
C A PITA L M A N AG E ME NT
The purpose of the TOM TAILOR GROUP’s capital manage-
In the reporting period, the change in equity was driven by both
ment is to safeguard its ability to continue as a going concern,
a cash capital increase from which TOM TAILOR received gross
guarantee an adequate return on equity and optimise the
proceeds totalling around EUR 29.5 million and the negative
capital structure.
consolidated net income of EUR 16.2 million.
The Group manages its capital structure by borrowing and
The TOM TAILOR GROUP’s financial strategy is to use the cash
repaying debt, through the capitalisation measures indicated
flow generated from operations to continue reducing its debt
by investors and by using financial instruments to hedge
and strengthening its capital base going forward.
future cash flows, while at the same time bearing in mind the
economic and legal environment.
US E A ND M A N AG E ME NT OF FIN A NCI A L
IN S TRU ME NT S
Loan finance granted by banks is dependent on compliance
In particular, financial liabilities comprise bank loans, finance
with certain financial covenants; these are to be calculated on
leases and trade payables. The main purpose of these finan-
the basis of the consolidated financial statements prepared
cial liabilities is to finance the Group’s business activities. The
in accordance with International Financial Reporting Standards
Group has various financial assets such as trade receivables
(IFRSs). They include a mandatory equity ratio and restrictions
and cash funds that result directly from its business activities.
on distributions if the equity ratio is inadequate. The external
minimum capital requirements have increased compared with
The Group also holds derivative financial instruments. These
the previous year.
primarily include interest rate hedges (interest rate swaps)
and currency forwards. The purpose of these derivative finan-
The capital structure is monitored primarily using cash-flow-
cial instruments is to hedge interest rate and currency risk
related indicators (recurring EBITDA/net interest income
resulting from the Group’s business activities and sources
affecting cash flow, net debt (including future rent)/EBITDAR,
of financing. The use of derivative financial instruments is
net debt/recurring EBITDA).
subject to internal guidelines and control mechanisms.
110
FA IR VA LU E S OF FIN A N CI A L IN S TRUME NT S
The following table shows the carrying amounts and fair
values of the financial instruments recognised in the con
solidated financial statements:
Fair Value of Financial Instruments
Carrying amount
EUR thousand
Category
under IAS 39
Fair value
2013
2012
2013
2012
Financial assets
Trade receivables and other assets
LaR
71,041
69,276
71,041
69,276
LaR
47,129
53,382
47,129
53,382
Acquisition loan
Flac
165,847
172,962
165,847
172,962
Other liabilities to banks
Flac
72,148
108,447
72,148
108,447
Finance lease liabilities
Flac
16,195
14,558
16,195
14,558
Liabilities to third parties
Flac
7,000
2,500
7,000
2,500
Liabilities to third parties
Fvtpl
4,434
2,727
4,434
2,727
Derivatives used to hedge interest rate and currency risk
that are not part of a hedging relationship
Fvtpl
2,616
3,340
2,616
3,340
Derivatives used to hedge interest rate and currency risk
that are part of a hedging relationship
n.a.
Trade payables and other liabilities
Flac
Liabilities to banks
8,334
5,011
8,334
5,011
114,491
96,800
114,491
96,800
Flac = financial liabilities measured at amortised cost
Fvtpl = financial assets/financial liabilities at fair value through profit or loss
LaR = loans and receivables
The fair values of the derivative financial instruments based on
The fair values of cash and cash equivalents, trade receiv
the notional amounts do not reflect offsetting changes in the
ables, other receivables, trade payables, other current financial
value of hedged items. They are not necessarily the amounts
liabilities and revolving credit facilities correspond to their
the Group will generate or have to pay in the future under
carrying amounts. This is due primarily to the short terms of
current market conditions.
such instruments.
With the exception of the derivatives entered into to hedge
Trade receivables in particular are measured by the Group
interest rate risk, the hedges existing at the reporting date
mainly on the basis of the individual customer’s credit quality.
meet the requirements for hedge accounting under IAS 39.
Based on this measurement, valuation allowances are recog-
All changes in the fair value of derivatives in an effective
nised to account for the losses expected on these receivables.
hedging relationship are recognised in accumulated other
As at 31 December 2013 the carrying amounts of these re-
comprehensive income (EUR –8,334 thousand; 2012: EUR –5,011 ceivables less valuation allowances did not differ significantly
thousand). Derivatives that are not part of an effective
from their assumed fair values.
hedging relationship are recognised in the income statement
immediately.
111
The TOM TAILOR GROUP generally determines the fair value
based on the current market value of the shares at the
of liabilities to banks and other financial liabilities, finance
relevant date.
lease liabilities and other non-current financial liabilities by
discounting the expected future cash flows at the rates
The Group only enters into derivative financial instruments
applicable to similar financial liabilities with a comparable
with financial institutions with a good credit rating. Interest
remaining maturity. Interest is paid on the syndicated loan
rate hedges (interest rate swaps) and forward exchange con-
granted by the banks at current market rates, as a result of
tracts are measured using a valuation technique with inputs
which its carrying amount and fair value at the reporting
observable in the market. The most frequently used valuation
date are largely the same. The fair value measurement also
techniques include forward pricing and swap models that
takes into account any collateral provided. No changes in
apply present value calculations.
the value of collateral are apparent.
The models capture a number of variables, such as the credit
For financial instruments that are measured at fair value
quality of business partners, spot and forward exchange rates,
and for which there are no quoted prices in an active mar-
and yield curves.
ket, fair value is determined using valuation techniques,
primarily the discounted cash flow method. This is based
The Group applies the following hierarchy to the valuation
on management’s forecasts and assumptions about future
techniques used to measure and present the fair values of
revenue and earnings, investments, growth rates and dis-
financial instruments:
count rates.
–Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities
The purchase price liabilities arising from the acquisition of the
–Level 2: techniques where all inputs that have a significant
51% interests in TOM TAILOR Retail Joint Venture GmbH,
effect on the recognised fair value are observable either
Bregenz/Austria, and S.C. TOM TAILOR RETAIL RO SRL, Bucha-
directly or indirectly
–Level 3: techniques that use inputs that have a significant
rest/Romania, were classified as financial liabilities at fair
value through profit or loss. The options to acquire shares in
effect on the recognised fair value and are not based on
TOM TAILOR E-Commerce GmbH & Co. KG granted to the
observable market data
partner in a cooperation project related to online activities
were also classified as financial liabilities at fair value through
The following table show the financial instruments for
profit or loss. These financial liabilities comprise contingent
financial years 2013 and 2012 that are subsequently measured
purchase price payments, the amount of which will be
at fair value.
Fair Value of Financial Instruments
2013
2012
Total
Level 1
Level 2
Level 3
Total
Derivatives used to hedge interest rate risk
(interest rate swap)
2,616
–
2,616
–
3,340
–
3,340
–
Contingent consideration from business
combinations
4,434
–
–
4,434
2,727
–
–
2,727
EUR thousand
Level 1
Level 2
Level 3
Financial liabilities at fair value through
profit or loss
Hedging instruments designated as cash flow
hedges (currency forwards)
8,334
–
8,334
–
5,011
–
5,011
–
15,384
–
10,950
4,434
11,078
–
8,351
2,727
112
The financial liabilities based on a Level 3 fair value measurement are the contingent purchase price payments arising from
the acquisition of the majority interests in TOM TAILOR Retail
Joint Venture GmbH, Bregenz/Austria, and S.C. TOM TAILOR
RETAIL RO SRL, Bucharest/Romania.
Expenses of EUR 1,159 thousand (2012: income of EUR 125 thousand) related to the contingent consideration were recognised
in the consolidated income statement during the reporting
period.
The following table shows the reconciliation of the Level 3
measurements to the fair value of financial liabilities.
Reconciliation of Level 3 Measurements to
the Fair Value of Financial Liabilities
EUR thousand
Purchase price liabilities
31 December 2013
Total gains and losses
Opening
balance
Acquisitions
2,727
548
Recognised
in the income
Disposals
statement
Recognised
in other
comprehensive income
Reclassi
fications
Closing
balance
1,159
–
–
4,434
–
31 December 2012
Total gains and losses
Purchase price liabilities
Opening
balance
Acquisitions
2,321
–
Recognised
in the income
Disposals
statement
Recognised
in other
comprehensive income
Reclassi
fications
Closing
balance
–125
–
531
2,727
–
113
Derivative financial instruments are entered into to manage
Net Gains and Net Losses on Financial Instruments
EUR thousand
Loans and receivables
of which net interest income
existing interest rate and currency risk. These include:
2013
2012
–4,066
–4,819
96
–761
–11,621
–8,606
–10,843
–6,980
–1,625
–1,639
–1,499
–1,119
that results from importing items of clothing produced
mainly in Asia
–interest rate swaps to reduce the risk of rising interest
Financial liabilities measured at
amortised cost
Financial assets/liabilities at fair value
through profit or loss
–currency forwards to hedge the foreign exchange risk
rates on variable-rate financial liabilities

The sensitivity analyses in the following sections refer in each
case to the data as at 31 December 2013 and 2012.
The sensitivity analyses were prepared on the basis of the
Net gains and losses on financial instruments comprise
hedging relationships existing on 31 December 2013 and on the
measurement gains and losses, changes in the value of pre-
assumption that net debt, the ratio of fixed to variable inter-
miums and discounts, the recognition and reversal of impair-
est rates on liabilities and derivatives, and the percentage of
ment losses, currency translation gains and losses, interest
financial instruments in foreign currencies remain unchanged.
and all other effects of financial instruments on profit or loss.
The financial assets/liabilities at fair value through profit or
Credit Risk
loss item only includes gains and losses on those instruments
The Group is exposed to credit risk as a result of its operating
that are not designated as hedging instruments in a hedging
business and certain financing activities.
relationship under IAS 39.
To minimise credit risk in the operating business, the outstandThe significant risks to the Group arising from financial instru-
ing amounts are monitored centrally and on an ongoing basis.
ments comprise interest-rate-related cash flow risk as well
as liquidity, currency and credit risk. The Company’s manage-
The Group only enters into business transactions with third
ment decides on strategies and methods for managing specific
parties with a good credit rating. Credit checks are run on all
types of risk, which are presented in the following.
customers wanting to do business with the Group on a credit
basis. In addition, the risk is mitigated by taking out credit
M A RKE T R I S K
insurance policies and obtaining collateral. Identifiable credit
Market risk is the risk that the fair value or future cash flows
risks are accounted for by recognising specific valuation
of a financial instrument will fluctuate because of changes
allowances.
in market prices.
In its financing activities, the risk of default by the counterDue to its activities, the Group is mainly exposed to financial
party concerned is limited by selecting financial institutions
risk arising from changes in exchange rates (see Currency Risk
of good and very good credit quality.
below) and changes in interest rates (see Interest Rate Risk
below). The Group’s operations are also affected by credit risk
The maximum exposure to credit risk is reflected in the
(see Credit Risk below) and liquidity risk (see Liquidity Risk
carrying amounts of the trade receivables and cash and cash
below).
equivalents carried in the balance sheet.
114
Liquidity Risk
In order to both ensure that the Group remains solvent at
all times and safeguard its financial flexibility, a revolving
liquidity plan is created that shows the inflow and outflow of
liquidity in both the short and medium term. If necessary,
a liquidity reserve is held in the form of credit lines and cash
funds.
The following tables show the maturity analysis of the financial liabilities, including the remaining contractual maturities
and expected interest payments.
Analysis of Maturity in the Reporting Period
Non-derivative financial liabilities
EUR thousand
Carrying amount at 31 December 2013
Derivative liabilities
Liabilities
to banks
Finance
leases
Other Interest rate
liabilities
hedges
Currency
hedges
237,995
16,195
125,925
2,616
8,334
7,750
1,028
–
888
–
15,000
4,478
121,491
–
8,334
Cash flows in 2014
Interest payments
Principal repayments
Cash flows 2015 to 2018
9,831
1,244
–
1,728
–
222,995
11,717
4,434
–
–
Interest payments
–
–
–
–
–
–
–
–
–
–
Interest payments
Cash flows 2019 f.
Analysis of Maturity in the Previous Year
Non-derivative financial liabilities
Derivative liabilities
EUR thousand
Liabilities
to banks
Finance
leases
Other Interest rate
liabilities
hedges
Carrying amount at 31 December 2012
281,409
14,558
102,027
3,340
Currency
hedges
5,011
Cash flows in 2013
7,116
1,054
–
1,036
–
90,000
4,115
99,300
–
5,011
15,501
1,428
–
2,023
–
191,409
10,443
2,727
–
–
Interest payments
–
–
–
–
–
–
–
–
–
–
Interest payments
Cash flows 2014 to 2017
Interest payments
Cash flows 2018 f.
115
For reasons of simplification, a constant yield curve was
assumed for the cash flows from expected interest payments.
Currency Risk in the Reporting Period
31 December 2013
The notional value of the forward exchange contracts amounts
to USD 237,200 thousand and falls due ratably over a period
EUR thousand
up to and including 2015.
Trade receivables
Amount
in local
currency
Closing rate
local
currency/
EUR
TCHF 1,621
1.23
Amount
EUR
thousand
1,321
1,321
Currency Risk
Trade payables
TUSD 20,441
1.38
14,822
14,822
The Group’s exposure to currency risk results from its operating activities. The Group purchases some of its merchandise
in US dollars. In the reporting period, currency forwards were
In the previous year, the Group had the following trade
entered into to hedge risks arising from changes in exchange
receivables and payables denominated in foreign currencies:
rates.
In the same period, cash inflows from those currency forwards
Currency Risk in the Previous Year
31 December 2012
were allocated to specific expected cash outflows for merchandise purchases, as a result of which the currency forwards
entered into were designated as cash flow hedges (hedges
EUR thousand
of cash flows from forecast transactions). In addition to the
Trade receivables
Amount
in local
currency
Closing rate
local
currency/
EUR
Amount
EUR
thousand
TCHF 1,050
1.21
870
TUSD 17,181
1.32
13,022
870
intrinsic value, the time value of the option is designated.
At the reporting date, the currency forwards were measured
Trade payables
13,022
at their fair value. The fair values were determined by banks
using the exchange rates for hedges with matching maturities
at the reporting date. The fair value of the currency forwards
Comprehensive income from foreign exchange gains and
existing at the reporting date in the amount of EUR –8,334 losses (excluding derivatives) amounted to EUR 1,275 thousand
thousand (2012: EUR –5,011 thousand) was recognised net of
in financial year 2013 (2012: EUR –1,627 thousand).
deferred taxes in the amount of EUR –2,544 thousand (2012:
EUR –1,503 thousand) in the hedge reserve and accordingly in
In accordance with IFRS 7, the Group prepares sensitivity
other comprehensive income if the hedging relationship
analyses for currency risk, which it uses to determine the
was regarded as effective. Income and expenses from currency
effects on profit or loss and equity of hypothetical changes
forwards are included in the purchase costs of merchandise
in relevant risk variables. The periodic effects are deter-
and realised in the short term through cost of materials. The
mined by applying the hypothetical changes in the risk vari-
prior-year amounts were included in profit or loss for the
ables to the portfolio of financial instruments at the report-
period. All hedged future merchandise purchases and there-
ing date. In doing so, it is assumed that the portfolio at the
fore all cash flows are expected to occur in 2014.
reporting date is representative of the year as a whole. The
currency risk sensitivity analyses are based on the following
Losses of EUR4,193 thousand (2012: income of EUR4,879 assumptions:
thousand) were reclassified from other comprehensive
–The majority of the non-derivative financial instruments
income to profit and loss in financial year 2013. Correspond-
(securities, receivables, cash and cash equivalents, liabilities)
ing deferred taxes amounted to EUR 1,283 thousand (2012:
are denominated directly in euros, the functional currency.
If these financial instruments are not denominated in euros,
they are included in the sensitivity analyses.
In addition, the Swiss Group companies are exposed to
currency risk as a result of business relationships with
TOM TAILOR that are accounted for in euros. The Group’s trade
–Exchange-rate-related changes in the fair values of currency
derivatives affect equity (hedge reserve).
–Significant effects result from changes in the exchange rates
receivables and payables denominated in foreign curren-
for the US dollar and the Swiss franc versus the euro. Changes
cies (less cash and cash equivalents in foreign currencies) are
in the exchange rates of other currencies have only insigni
primarily as follows:
ficant effects and therefore are not considered separately.
116
If the euro had risen (fallen) by 10% against the US dollar at the
In the reporting period, interest income of EUR 1,033 thousand
reporting date, the net exchange rate gain on liabilities recog-
(2012: interest expense of EUR258 thousand) on interest rate
nised in US dollars would have been EUR 1,347 thousand higher
hedging instruments at fair value through profit or loss was
or EUR1,647 thousand lower, respectively (2012: EUR 1,279 thou-
reported in the net financial result.
sand higher or EUR 1,563 thousand lower). By contrast, the
hedge reserve recognised in equity for currency forwards en-
In accordance with IFRS 7, interest rate risk is presented using
tered into in US dollars would have been EUR 16,590 thou-
sensitivity analyses. These indicate the effects of changes
sand lower or EUR 17,391 thousand higher, respectively (2012:
in market interest rates on interest payments, interest income
EUR 16,623 thousand lower or EUR 16,549 thousand higher).
and expense, other components of profit or loss and, if
applicable, equity. The interest rate risk sensitivity analyses
A 10 % rise (fall) in the euro against the Swiss franc would
are based on the following assumptions:
have resulted in the currency translation reserve for financial
-Changes in market interest rates on fixed-rate non-deriva-
statements not prepared in the reporting currency being
tive financial instruments only affect profit or loss if these
EUR 104 thousand higher or EUR 127 thousand lower, respec-
are measured at fair value. Therefore, all fixed-rate financial
tively (2012: EUR 244 thousand higher or EUR 298 thousand
instruments measured at amortised cost are not exposed
lower).
to interest rate risk within the meaning of IFRS 7.
-Changes in market interest rates affect net interest income
Interest Rate Risk
on variable-rate non-derivative financial instruments
The Group is mainly exposed to interest rate risk in the
and are therefore included in the sensitivity calculations in
eurozone. The TOM TAILOR GROUP uses derivative financial
relation to profit or loss.
instruments to hedge the interest rate risk on variable-rate
-Changes in market interest rates on interest rate derivatives
affect net interest income (gain or loss on the fair value
loans.
remeasurement of financial assets and net interest income
An interest rate swap maturing at the end of 2016 is in place
from interest payments in the reporting period) and are
to limit interest rate risk. The term and the notional amount
therefore included in the sensitivity calculations in relation
to profit or loss.
do not match the underlying bank loans. The Company
receives a variable rate of interest based on 3-month EURIBOR

and pays a fixed rate of interest of 2.33%.
If market interest rates had been 100 basis points higher
(lower) at the reporting date, net interest income would
The following table shows the aggregate notional amounts,
have been EUR 3,961 thousand higher or EUR2,409 thousand
carrying amounts and fair values of the interest rate hedging
lower, respectively (2012: EUR 3,150 thousand higher or
products used:
EUR 2,563 thousand lower).
Other Price Risk
Interest Rate Hedges
The Group was not exposed to any significant other price
2013
2012
Notional amount
53,690
54,977
Carrying amount
–2,616
–3,340
Fair value
–2,616
–3,340
EUR thousand
risk in the reporting period or in the previous year.
117
CASH FLOW
DISCLOSURES
EUR144.5 million less the liquid assets acquired of EUR 28.5 million). Adjusted for these effects, net cash used in investing
activities was down year-on-year. Investments of EUR26.9 million (2012: EUR35.6 million) were made to increase selling
The statement of cash flows shows how the Group’s cash
spaces for the three segments, TOM TAILOR wholesale,
and cash equivalents change due to cash inflows and outflows
TOM TAILOR retail and BONITA.
over the course of the reporting period. IAS 7 Statements of
Cash Flows distinguishes between cash flows from operating,
Since they do not affect cash flows, the additions to leased
investing and financing activities.
intangible assets and items of property, plant and equipment
classified as finance leases were offset against the change
The cash and cash equivalents reported in the statement
(also non-cash) in financial liabilities to which the liabilities
of cash flows include all of the liquid assets recognised in the
under finance leases are assigned.
balance sheet, namely cash-in-hand, cheques and bank balances, provided that they are available within three months
Net cash used in financing activities amounted to EUR27.0 mil-
without material changes in value.
lion in the period under review, compared with net cash from
financing activities of EUR 187.0 million in the previous year.
The cash generated by the Group’s operating activities amount-
The gross proceeds of the cash capital increase implemented
ed to EUR46.9 million in financial year 2013 (2012: EUR 5.7 mil-
in October 2013 provided net cash of EUR 29.5 million.
lion). The year-on-year decline in net income for the period
However, the scheduled repayment of long-term loans of
(down EUR 19.3 million) was largely offset by the increase in
EUR 10.0 million and the seasonal drawdowns of existing
non-cash depreciation/amortisation (up EUR 18.9 million)
bank lines of credit in connection with the Group’s operating
compared with the previous year. The significant year-on-year
activities led to a cash outflow. The entire EUR 80 million
reduction in tax payments (EUR +13.5 million) was offset by
issued under the borrower’s note loan was used to refinance
the further increase in inventories due to expansion (negative
the short-term bank liabilities from the acquisition of the
effect of EUR –13.7 million). Overall, funds tied up in invento-
BONITA group of companies.
ries were much lower than in the previous year. Cash flow was
also positively impacted by the seasonal and expansion-related
As at 31 December 2013, financing activities also included
increase in trade payables.
unused lines of credit amounting to EUR65.4 million (2012:
EUR 29.1 million).
Investing activities led to a cash outflow of EUR26.0 million for
the TOM TAILOR GROUP in financial year 2013, compared with
The effects of changes in cash and cash equivalents due to
EUR 148.8 million in the previous year. This decline is attribut
exchange rates were largely attributable to the Swiss
able to the acquisition of BONITA in 2012 and the associated
subsidiaries and were reported separately as the “Effect of
cash outflow of EUR 116.0 million (purchase price payment of
exchange rate changes on cash and cash equivalents”.
118
SEGMENT REPORTING
Operating Segments 2013 (2012)
EUR thousand
Wholesale
Retail
Consolidation
TOM TAILOR
TOM TAILOR
BONITA
Total
302,448
(269,908)
254,070
(205,840)
350,731
(153,949)
604,801
(359,789)
–
(–)
907,249
(629,897)
90,632
(83,623)
–
(–)
–
(–)
–
(–)
–90,632
(–83,623)
–
(–)
393,080
(353,531)
254,070
(205,840)
350,731
(153,949)
604,801
(359,789)
–90,632
(–83,623)
907,249
(629,897)
26,315
(124)
25,521
(19,379)
12,006
(33,890)
37,528
(53,270)
289
(1,616)
64,131
(55,010)
17,779
(25,370)
1,885
(1,919)
5,734
(–8,361)
7,619
(–6,442)
–
(–)
25,398
(18,928)
Germany
International
markets
Group
Revenue
590,702
(419,238)
316,547
(210,459)
907,249
(629,697)
Non-current assets
433,501
(457,646)
73,842
(58,619)
507,343
(516,265)
Third-party revenue
Intersegment revenue
Revenue
Earnings before interest, taxes, depreciation and amortisation
(EBITDA)
Material non-cash expenses/income
Information about Regions 2013 (2012)
EUR thousand
Group
In accordance with the management approach under IFRS 8,
ferentiation between the TOM TAILOR and BONITA brands
the segments correspond to the TOM TAILOR GROUP’s busi-
has been made.
ness activities. The TOM TAILOR GROUP’s business activities
are classified based on the distribution structure and by
In principle, the recognition and measurement methods
brands into the TOM TAILOR wholesale, TOM TAILOR retail and
used for the consolidated financial statements are also
BONITA segments. This segmentation corresponds to the
applied to the segment information.
internal management and reporting and reflects the different
risk and earnings structures of the business areas.
TOM TAILOR’s Management Board has specified the use
of EBITDA and revenue, which are used for management
In the wholesale segment, TOM TAILOR products are distrib-
and reporting, as performance indicators.
uted by resellers through franchise stores, shop-in-shops and
multi-label stores (B2B).
Net interest income and tax income and expenses are
only considered at overall Group level for management
In the retail segment, the collections of the different product
purposes.
lines are sold directly to end customers via own stores
(centre stores, city stores, flagship stores and outlets) and an
The assets and liabilities of each segment are not disclosed,
e-shop (B2C). The e-partnerships in the e-business, which
in accordance with the management approach under IFRS 8,
reach end customers via a reseller, are the only exception. This
since this information is not reported at segment level.
business is assigned to the retail segment based on internal
management and reporting. The retail segment was extended
Intersegment income, expenses and earnings are eliminated
to include BONITA in financial year 2012, so an additional dif-
in consolidation.
119
Intragroup revenue is eliminated on an arm’s length basis.
Other Financial Obligations 2012
31 December 2012
The non-cash items mainly comprise changes in provisions,
the measurement of currency forwards and impairment
EUR thousand
losses on inventories and trade receivables.
Leases
The information on segment revenue by regions shown above
is classified by customer location. Non-current assets by region
of which Nordport
logistics centre
Receivables from
sublease: Nordport
logistics centre
are composed of intangible assets and items of property,
plant and equipment.
Other operating
leases
Other
OTHER DISCLOSURES
A N D E X P L A N AT I O N S
Within
one year
Between
one and five
years
More than
five years
Total
95,103
298,591
120,620
514,314
1,513
4,791
–
6,304
–1,513
–4,791
–
–6,304
2,030
3,250
–
5,280
11,140
31,540
20
42,700
106,760
328,590
120,640
555,990
Financial obligations from rental agreements were largely
attributable to the leasing of retail and outlet stores.
RE S E A RCH A ND DE V E LOPME NT
Research and development costs reported under expenses
Other financial obligations primarily consist of minimum
amounted to EUR 10,750 thousand (2012: EUR9,791 thousand).
purchase obligations under an existing logistics outsourcing
They relate to the development of the collections.
contract and a new logistics outsourcing contract entered
into in 2013 with a term until 2024.
CONTING E NT LI A BILITIE S A ND OTHE R
FIN A NCI A L OB LIG ATION S
As at 31 December 2013, the Group had obligations to
Contingent Assets and Liabilities
purchase goods in 2014 amounting to EUR95.8 million (2012:
As at the reporting date, there were no contingent assets
EUR 96.5 million) resulting from binding purchase orders
and liabilities that have a material effect on the net assets,
placed with suppliers by the reporting date.
financial position and results of operations.
Other Financial Obligations
SU PPLE ME NTA RY DI SCLOSU RE S ON
RE NTA L AG RE E ME NT S A ND LE A S E S
The Group’s other financial obligations mainly consisted of
The payments under leases recognised as an expense in the
the following rental agreements and operating leases:
reporting period amounted to EUR7,883 thousand (2012:
EUR6,755 thousand). These related solely to minimum lease
payments. Contingent lease payments are largely revenue-
Other Financial Obligations 2013
based and amounted to EUR 2,091 thousand in the reporting
31 December 2013
EUR thousand
Leases
of which Nordport
logistics centre
Receivables from
sublease: Nordport
logistics centre
Within
one year
Between
one and five
years
More than
five years
Total
98,899
299,672
106,565
505,136
1,513
3,278
–
4,791
period (2012: EUR 1,601 thousand). In addition, leases may
contain escalation agreements (index-adjusted rents, graduated rent) and common industry lease prolongation options.
There were no sublease payments with a material effect in
either financial year 2013 or 2012.
Expenses for other operating leases of EUR4,175 thousand were
recognised in the reporting period (2012: EUR 2,797 thousand).
–1,513
–3,278
–
–4,791
Other operating
leases
2,460
3,497
237
6,194
Other
9,571
75,620
97,100
182,291
the previous year. Please refer to the disclosures under Other
109,417
375,511
203,902
688,830
Financial Obligations.
Excluding the lease obligation for the Nordport logistics centre,
subleases were insignificant in both the reporting period and
120
BORROW ING COS T S
With the exception of Mr Holzer, the members of the Manage-
No borrowing costs were capitalised in the reporting period
ment Board were not members of other supervisory boards or
because there were no qualifying assets that take a substan-
governing bodies during the reporting period.
tial period of time to get ready for their intended use or sale.
Mr Dieter Holzer has been a member of the Advisory Board of
RE L ATE D PA R T Y DI SCLOSU RE S
JW Germany Holding GmbH, Idstein/Taunus since 1 July 2013.
In accordance with IAS 24 Related Party Disclosures, relationships with persons who or entities that control the Group or
Management Board Remuneration:
are controlled by the Group must be disclosed, unless they are
Share-Based Remuneration System
included in the consolidated financial statements as consoli-
On 20 January 2010, the Supervisory Board resolved to im-
dated companies.
plement a stock-based remuneration system (the Matching
Stock Programme, or MSP) for the members of the Manage-
In principle, related parties of the TOM TAILOR GROUP may
ment Board. The MSP runs for a total of 14 years from the date
be members of the Management Board and the Supervisory
of the initial listing and serves to align the mutual interests
Board, as well as those companies that are controlled or
of the Management Board and the shareholders.
influenced by members of governing bodies. Joint ventures
and associates may also be related parties.
The MSP consists of a total of five tranches. The first tranche
was allotted on the date of initial listing; the following
Joint Ventures and Associates
tranches are each allotted one year after the respective pre-
TOM TAILOR GROUP holds an interest in a company in Northern
ceding tranche. The members of the Management Board
Ireland; this relationship falls within the scope of normal
must have an ongoing service or employment contract with
business dealings.
TOM TAILOR Holding AG and hold shares of TOM TAILOR
Holding AG (MSP shares) at the time of allotment. Each MSP
The Northern Irish company is TT OFF SALE (NI) LTD., Belfast/
share conveys the right to 0.4 (Chief Executive Officer) or
United Kingdom, and its wholly owned subsidiary, TT OFF
three (other members of the Management Board) phantom
SALE (Ireland) LTD., Dublin/Ireland, in which Tom Tailor GmbH
shares per tranche. The phantom shares are subject to a
directly and indirectly holds 49% of the shares as part of a
vesting period of four years from the date of allotment of the
franchise partnership. TT Off Sale (NI) LTD. is operated by the
relevant tranche. They are automatically exercised during
partner. The goods and services provided to the company
defined windows, provided the exercise threshold is reached,
amounted to EUR905 thousand in the reporting period (2012:
an MSP gain can be determined and the participant has not
EUR 1,584 thousand). The receivables from the company
objected to the exercise in due time. The exercise threshold is
(net of valuation allowances) amounted to EUR0 thousand
reached if TOM TAILOR Holding AG’s shares have outper-
as at 31 December 2013 and EUR2,072 thousand as at 31 De-
formed the SDAX® since the allotment of the relevant tranche.
cember 2012. Valuation allowances on receivables from TT OFF
On exercise, the members of the Management Board are
SALE (NI) LTD. of EUR 2,197 thousand were recognised as
paid the difference between the price at the time of exercise
expenses in financial year 2013 (2012: EUR 1,438 thousand).
and the strike price of all of the phantom shares exercised,
less payroll tax and other deductions, in the form of TOM TAILOR
Related Parties (Persons)
Holding AG shares. The amount determined before payroll
Management Board
tax and other deductions is capped for each tranche at 2.5% of
Mr Dieter Holzer
the EBITDA reported in the most recent consolidated financial
Businessman, Ravensburg/Germany
statements of TOM TAILOR Holding AG.
(Chief Executive Officer)
Dr Axel Rebien
The MSP was classified and measured as an equity-settled
Businessman, Quickborn/Germany
share-based payment transaction. Cash settlement is not per-
Dr Marc Schumacher
mitted, with the exception of fractional shares. The fair value
Businessman, Hamburg/Germany
of the equity instruments has been estimated for all tranches
Mr Udo Greiser
based on a Monte Carlo model, taking into consideration
Businessman, Konstanz/Germany
the conditions in which the phantom shares were granted.
121
This includes modelling the exercise threshold and the
The MSP gave rise to an expense for equity-settled share-
simulation of future exercise prices and strike prices.
based payment transactions of EUR 233 thousand in the
Fair value measurement was carried out based on the follow-
reporting period (2012: EUR 257 thousand).
ing parameters:
With regard to the long-term incentive programme (LTI),
please refer to the disclosures under note 21 “Other
Fair Value Parameters
Provisions”.
2011 tranche
2012 tranche
2.50%
2.50%
Remaining term
7.5 to 11.5 years
7.5 to 11.5 years
option programme (Long-Term Stock Option Programme),
Expected volatility
31.65 to 32.90%
29.25 to 29.70%
which is described under note 18 “Long-Term Stock Option
3.10 to 3.54%
2.90 to 3.26%
EUR 12.85
EUR 13.91
3,832.91
5,466.82
19.23 to 19.56%
19.05 to 19.46%
Dividend yield
Risk-free interest rate
Programme”. Under the Long-Term Stock Option Programme,
up to 1,800,000 stock option rights can be issued to mem-
Share price at measurement
date
bers of the Management Board of TOM TAILOR Holding AG.
200,000 stock option rights were issued to members of the
SDAX® price at measurement
date
Expected SDAX® volatility
In June 2013, the Annual General Meeting resolved a stock
Management Board in financial year 2013. The measurement
of the issued stock option rights led to a ratable expense of
EUR 51 thousand for 2013.
The term in each case has been determined as the period from
the measurement date until the maturity of the relevant
tranche. The expected share price volatility has been deter-
Governing Body Remuneration
2013
2012
6,263
4,671
Other long-term incentives (LTI)
642
2,196
the basis of historical volatility. Consequently, actual volatility
Long-term share-based remuneration (MSP)
233
257
may differ from the assumptions made. The Company re-
Stock option programme
51
–
7,189
7,124
mined based on comparable listed companies, due to the
EUR thousand
lack of historical data available. The expected volatility is based
Salaries and short-term benefits
on the assumption that future trends can be predicted on
views its estimates of the number of equity instruments and
the parameters at each reporting date. Differences compared with the initial recognition of the options are adjusted
The fixed and variable remuneration components were paid
and recognised in the income statement.
during the course of the year or will fall due shortly after the
annual financial statements are adopted. The long-term
The weighted average fair value of the phantom shares
benefits are variable. At the reporting date, they included Man-
awarded in previous reporting periods and calculated based
agement Board entitlements under the MSP, the Long-Term
on these parameters was EUR 3.12, or EUR 3.14.
Stock Option Programme and the LTI programme totalling
EUR2,464 thousand (2012: EUR3,519 thousand). These benefits
As part of the MSP, the members of the Management Board
will fall due for payment in 2014 and 2015 at the earliest. De-
have contributed a total of 282,000 MSP shares to the
tails of the remuneration of the individual Management Board
programme, with 72,500 MSP shares contributed in financial
members in accordance with section 314 (1) no. 6 a, sentences 5
year 2011. In 2010, 209,500 MSP shares with a strike price
to 8 of the Handelsgesetzbuch (HGB – German Commercial
of EUR 13.00 were contributed, while the strike price of the
Code) are presented in the remuneration report in the Group
72,500 newly contributed shares is EUR 13.63. These MSP
Management Report.
shares convey the right to acquire a total of 925,000 phantom
shares (of which 220,000 phantom shares relate to the MSP
Related Party Disclosures (Persons)
shares contributed in 2011).
In accordance with IAS 19, a provision of EUR 223 thousand
was recognised for pension obligations to former members
At the reporting date, all of the phantom shares were out-
of the management and their surviving dependants (2012:
standing and were not exercisable.
EUR 199 thousand).
122
Shareholdings of Members of the Management Board
Mr Oliver Schröder has been employed by the TOM TAILOR
At 31 December 2013 and 31 December 2012, the Management
GROUP since 1998.
Board held the following number of shares:
Mr Thomas Schlytter-Henrichsen (Deputy Chairman) indirectly
holds shares in TOM TAILOR Holding AG.
Shareholdings of the Members
of the Management Board
Members of the Supervisory Board directly held the follow31/12/2013
31/12/2012
Dieter Holzer
266,610
266,610
Dr Axel Rebien
20,000
20,000
4,000
4,000
Number of shares
Udo Greiser
ing shares as at 31 December 2013: Dr Christoph Schug
18,400 shares, Gerhard Wöhrl 16,700 shares and Andreas W.
Bauer 5,400 shares.
Mr Gerhard Wöhrl is the majority shareholder of Rudolf Wöhrl
Supervisory Board
AG. The TOM TAILOR GROUP generated revenue of around
In accordance with the Articles of Association, the Supervisory
EUR4.9 million with Rudolf Wöhrl AG in 2013. Trade receivables
Board is composed of six members.
amounted to EUR0.3 million as at 31 December 2013.
The members are:
Mr Andreas W. Bauer is a partner in the consulting firm Roland
Mr Uwe Schröder
Berger Strategy Consultants, Munich. A consultancy agree-
Businessman, Hamburg/Germany (Chairman)
ment was entered into between TOM TAILOR and Roland Ber
Mr Thomas Schlytter-Henrichsen
ger Strategy Consultants in connection with the integration
Businessman, Königstein/Taunus/Germany (Deputy Chairman)
of BONITA and the related due diligence processes. In financial
Mr Andreas W. Bauer
year 2013, EUR980 thousand was paid for consulting services.
Businessman, Munich/Germany
Trade payables amounted to EUR0 thousand as at 31 Decem-
Mr Andreas Karpenstein
ber 2013.
Lawyer, Düsseldorf/Germany
Dr Christoph Schug
Other Appointments of the Members of the
Entrepreneur, Mönchengladbach/Germany
Supervisory Board
Mr Gerhard Wöhrl
Members of TOM TAILOR Holding AG’s Supervisory Board are
Businessman, Munich/Germany
also members of a governing body of the following companies:
Uwe Schröder (Chairman of the Supervisory Board)
of the Supervisory Board receive a fixed yearly remuneration
Member of the Advisory Board of eterna Mode GmbH,
of EUR40 thousand (the Chairman receives EUR 150 thousand
Passau/Germany
and the Deputy Chairman EUR75 thousand) in addition to
Managing Director of Schröder Consulting GmbH,
compensation for out-of-pocket expenses (plus VAT, if applic
Flensburg/Germany
able). This remuneration is payable after the end of the An
Member of the Advisory Board of Kassenhalle Restaurant
nual General Meeting receiving or resolving the approval of
GmbH & Co. KG, Hamburg/Germany
the consolidated financial statements for the financial year
Chairman of the Supervisory Board of Hansische Treuhand AG,
in question.
Hamburg/Germany
Chairman of the Verband der Fertigwarenimporteure e.V.
Mr Uwe Schröder (Chairman) indirectly holds shares in
(VFI – Association of Non-Food Importers), Hamburg/Germany
TOM TAILOR Holding AG. As a related party of Mr Uwe Schröder,
Schröder Consulting GmbH receives sponsorship payments
Thomas Schlytter-Henrichsen
from TOM TAILOR GmbH for TOM TAILOR’s brand association
(Deputy Chairman of the Supervisory Board)
with the sport of polo. Sponsorship payments of EUR 377 thou-
Managing Director of ALPHA Beteiligungsberatung
sand were made in 2013. There is an employment contract
GmbH & Co. KG, Frankfurt am Main/Germany
between TOM TAILOR Holding AG and the son of Supervisory
Managing Director of ALPHA Management GmbH,
Board Chairman Uwe Schröder, Mr Oliver Schröder.
Frankfurt am Main/Germany
123
Managing Director of ACapital Beteiligungsberatung GmbH,
Gerhard Wöhrl
Frankfurt am Main /Germany
Managing Director of Gerhard Wöhrl Beteiligungs-
Managing Director of Agrippina S.a.r.l., Luxembourg
gesellschaft mbH, Reichenschwand/Germany
Managing Director of Bulowayo GmbH,
Managing Director of GOVAN Beteiligungs GmbH,
Königstein im Taunus /Germany
Reichenschwand/Germany
Member of the Supervisory Board of Nero AG,
Managing Director of GOVAN Holding GmbH & Co. KG,
Karlsbad/Germany
Member of the Supervisory Board of ALPHA ASSOCIES
Managing Director of GOVAN Verwaltungs GmbH,
Conseil SAS, Paris/France
Managing Director of GVC Gesellschaft für Venture Capital
Andreas W. Bauer
Beteiligungen mbH, Munich/Germany
Partner at Roland Berger Strategy Consultants GmbH,
Member of the Advisory Board of Sparkasse Nürnberg,
Munich/Germany
Nuremberg/Germany
Member of the Advisory Board (Chairman) of TETRIS Grund-
Andreas Karpenstein
besitz GmbH & Co. KG, Reichenschwand/Germany
Partner and Managing Director of Raupach & Wollert
Member of the Advisory Board (Chairman) of TETRIS Grund-
Elmendorff Rechtsanwaltsgesellschaft mbH,
besitz Beteiligungsgesellschaft mbH,
Düsseldorf/Germany
Member of the Supervisory Board (Deputy Chairman)
Member of the Supervisory Board of SinnLeffers GmbH,
of Trusted Advice AG, Wirtschaftsprüfungsgesellschaft
Hagen/Germany
Steuerberatungsgesellschaft, Düsseldorf/Germany
Member of the Advisory Board of SinnLeffers GmbH,
Hagen/Germany
Dr Christoph Schug
Managing Director of Consulta Verwaltungs- und
Treuhand GmbH, Sankt Augustin/Germany
Member of the Supervisory Board of Norma Group SE,
Maintal/Germany
Member of the Supervisory Board of Baden-Baden
Cosmetics Group AG, Baden-Baden/Germany
124
DI SCLOSU RE S ON S H A RE HOLDING S
IN TOM TA ILOR HOLDING AG
On 31 May 2013, TOM TAILOR Holding AG received a voting
On 24 January 2013, TOM TAILOR Holding AG received a
reporting the following circumstances:
rights notification regarding the company listed below,
voting rights notification regarding the company listed below,
Vanguard Whitehall Funds
On 29 May 2013, in accordance with section 21 (1) sentence 1
Allianz Global Investors Europe GmbH
WpHG, Vanguard Whitehall Funds, Delaware, USA, notified
On 23 January 2013, in accordance with section 21 (1) sentence 1
us that its share of the voting rights in TOM TAILOR Holding AG
of the Wertpapierhandelsgesetz (WpHG – German Securities
fell below the threshold of 3 % on 27 May 2013, reaching
Trading Act), Allianz Global Investors Europe GmbH, Frankfurt
2.999% on that date. This corresponds to 726,102 voting rights.
am Main, Germany, notified us that its share of the voting
rights in TOM TAILOR HOLDING AG fell below the threshold of
On 3 June 2013, TOM TAILOR Holding AG received a voting
5% on 16 January 2013, reaching 4.90 % on that date. This
corresponds to 1,186,266 voting rights. 0.03% of this amount
(6,650 voting rights) is attributable to Allianz Global Investors Europe GmbH in accordance with section 22 (1) sentence 1
T. Rowe Price International Ltd
no. 6 of the WpHG.
On 23 May 2013, in accordance with section 21 (1) sentence 1
WpHG, T. Rowe Price International Ltd, London, United
On 19 February 2013, TOM TAILOR Holding AG received a
Kingdom, notified us that its share of the voting rights in
TOM TAILOR Holding AG exceeded the threshold of 3% on
31 December 2010, reaching 3.97 % on that date. This corres
ponds to 656,467 voting rights. 3.97% of this amount
River and Mercantile Asset Management LLP
(656,467 voting rights) is attributed to T. Rowe Price Inter
On 18 February 2013, in accordance with section 21 (1) sen-
national Ltd by the T. Rowe Price International Discovery
tence 1 WpHG, River and Mercantile Asset Management LLP,
Fund in accordance with section 22 (1) sentence 1 no. 6 WpHG.
London, United Kingdom, notified us that its share of the
voting rights in TOM TAILOR Holding AG fell below the thresh-
On 7 June 2013, TOM TAILOR Holding AG received a voting
old of 3% on 15 February 2013, reaching 2.94% on that date.
This corresponds to 711,301 voting rights. 2.94% of this amount
(711,301 voting rights) is attributable to River and Mercantile
Asset Management LLP in accordance with section 22 (1) sen-
T. Rowe Price International Discovery Fund
tence 1 no. 6 WpHG.
On 6 June 2013, in accordance with section 21 (1) sentence 1
WpHG, T. Rowe Price International Discovery Fund, Baltimore,
On 5 April 2013, TOM TAILOR Holding AG received a voting
Maryland, USA, notified us that its share of the voting rights
in TOM TAILOR Holding AG fell below the threshold of 3 % on
31 May 2013, reaching 2.97 % on that date. This corresponds
to 720,127 voting rights.
DWS Investment GmbH
On 2 April 2013, in accordance with section 21 (1) sentence 1
WpHG, DWS Investment GmbH, Frankfurt am Main, Germany,
notified us that its share of the voting rights in TOM TAILOR
Holding AG fell below the threshold of 5% on 27 March 2013,
reaching 4.85% on that date. This corresponds to 1,174,768 voting rights.
125
On 12 August 2013, TOM TAILOR Holding AG received voting
On 22 August 2013, TOM TAILOR Holding AG received a voting
rights notifications regarding the following companies
reporting the circumstances specified below:
Henderson Group Plc
DWS Investment GmbH
On 9 August 2013, in accordance with section 21 (1) WpHG,
On 21 August 2013, in accordance with section 21 (1) sentence 1
Henderson Group Plc, London, United Kingdom, notified
WpHG, DWS Investment GmbH, Frankfurt am Main, Germany,
exceeded the threshold of 3% on 8 August 2013, reaching
Holding AG fell below the threshold of 3% on 20 August 2013,
reaching 2.99 % on that date. This corresponds to 725,000 These voting rights are attributed to it in accordance with
voting rights.
section 22 (1) sentence 1 no. 6 in conjunction with section 22 (1)
sentence 2 WpHG.
On 2 September 2013, TOM TAILOR Holding AG received
Henderson Global Investors (Holdings) Plc
voting rights notifications regarding the following companies
Henderson Global Investors (Holdings) Plc, London, United
Schroders PLC
Kingdom, notified us that its share of the voting rights
In accordance with section 21 (1) WpHG, we were informed
in TOM TAILOR Holding AG exceeded the threshold of 3 % on
that, on 27 August 2013, the voting interest of Schroders PLC,
8 August 2013, reaching 3.12% on that date. This corresponds
London, United Kingdom, in our Company exceeded the
to 756,328 voting rights. These voting rights are attributed to
threshold of 5% and amounted to 5.02 % (1,215,737 voting
it in accordance with section 22 (1) sentence 1 no. 6 in con
rights). 5.02 % of this amount (1,215,737 voting rights) is
junction with section 22 (1) sentence 2 WpHG.
attributed to it in accordance with section 22 (1) sentence 1
no. 6 in conjunction with section 22 (1) sentence 2 WpHG.
Henderson Global Investors Limited
Schroder Administration Limited
Henderson Global Investors Limited, London, United Kingdom,
that, on 27 August 2013, the voting interest of Schroder
Holding AG exceeded the threshold of 3 % on 8 August 2013,
Administration Limited, London, United Kingdom, in our Com-
reaching 3.12% on that date. This corresponds to 756,328 vot-
pany exceeded the threshold of 5% and amounted to 5.02%
ing rights. These voting rights are attributed to it in accordance
(1,215,737 voting rights). 5.02% of this amount (1,215,737 voting
with section 22 (1) sentence 1 no. 6 WpHG.
rights) is attributed to it in accordance with section 22 (1)
sentence 1 no. 6 in conjunction with section 22 (1) sentence 2
On 16 August 2013, TOM TAILOR Holding AG received a voting
WpHG.
Schroders Investment Management Limited
Vanguard Whitehall Funds
that, on 27 August 2013, the voting interest of Schroders
On 15 August 2013, in accordance with section 21 (1) sentence 1
Investment Management Limited, London, United Kingdom,
WpHG, Vanguard Whitehall Funds, Delaware, USA, notified
in our Company exceeded the threshold of 5% and amount-
ed to 5.02 % (1,215,737 voting rights). 5.02 % of this amount
exceeded the threshold of 3% on 9 August 2013, reaching
(1,215,737 voting rights) is attributed to it in accordance with
section 22 (1) sentence 1 no. 6 WpHG.
126
On 5 September 2013, TOM TAILOR Holding AG received a
On 30 October 2013, TOM TAILOR Holding AG received
Deutsche Asset & Wealth Management Investment GmbH
On 3 September 2013, in accordance with section 21 (1) sen-
On 29 October 2013, in accordance with section 21 (1) sen-
tence 1 WpHG, Deutsche Asset & Wealth Management Invest-
tence 1 WpHG, Allianz Global Investors Europe GmbH, Frank-
ment GmbH, Frankfurt am Main, Germany, notified us that its
furt am Main, Germany, notified us that its share of the vot-
share of the voting rights in TOM TAILOR Holding AG exceeded
ing rights in TOM TAILOR Holding AG exceeded the threshold
the threshold of 3% on 29 August 2013, reaching 3.16% on
of 3 % on 28 October 2013, reaching 3.17% on that date.
that date. This corresponds to 765,000 voting rights. In addi-
This represents 825,263 of a total of 26,027,133 voting rights.
tion, Deutsche Asset & Wealth Management Investment
0.03% of this amount (7,530 of a total of 26,027,133 voting
GmbH informed us that 2.99 % (725,000 voting rights) of the
rights) is attributable to Allianz Global Investors Europe GmbH
total voting rights in TOM TAILOR Holding AG is directly attrib-
in accordance with section 22 (1) sentence 1 no. 6 WpHG.
utable to it and that 0.17% (40,000 voting rights) is indirectly
attributable to it in accordance with section 22 (1) sentence 1
On 1 November 2013, TOM TAILOR Holding AG received
no. 6 WpHG.
On 29 October 2013, TOM TAILOR Holding AG received
Commerzbank Aktiengesellschaft
On 29 October 2013, in accordance with section 21 (1) sentence 1 WpHG, Commerzbank Aktiengesellschaft, Frankfurt
Wellington Management Company, LLP
On 28 October 2013, in accordance with section 21 (1) WpHG,
rights in TOM TAILOR Holding AG exceeded the thresholds of
Wellington Management Company, LLP, Boston, Massa
3% and 5% on 24 October 2013, reaching 7.11% on that date.
chusetts, USA, notified us that its share of the voting rights
This corresponds to 1,849,604 voting rights.
in TOM TAILOR Holding AG exceeded the threshold of 3%
on 24 October 2013, reaching 3.30% on that date. This corres
Commerzbank Aktiengesellschaft
ponds to 858,654 voting rights. These voting rights are at-
tributed to it in accordance with section 22 (1) sentence 1 no. 6
tence 1 WpHG, Commerzbank Aktiengesellschaft, Frankfurt
WpHG.
rights in TOM TAILOR Holding AG fell below the thresholds of
3% and 5% on 28 October 2013, reaching 0.00% on that date.
This corresponds to 0 voting rights.
tence 1 WpHG, Allianz Global Investors Europe GmbH, Frankfurt am Main, Germany, notified us that its share of the vot-
On 2 December 2013, TOM TAILOR Holding AG received a
ing rights in TOM TAILOR Holding AG fell below the threshold
of 3% on 24 October 2013, reaching 2.94% on that date. This
represents 765,263 of a total of 26,027,133 voting rights. 0.03%
of this amount (7,530 of a total of 26,027,133 voting rights)
is attributable to Allianz Global Investors Europe GmbH in
On 2 December 2013, in accordance with section 21 (1) sen-
accordance with section 22 (1) sentence 1 no. 6 WpHG.
tence 1 WpHG, Allianz Global Investors Europe GmbH, Frankfurt am Main, Germany, notified us that its share of the voting rights in TOM TAILOR Holding AG fell below the threshold
of 3% on 29 November 2013, reaching 2.995% on that date.
127
ADWAY Corp.
On 3 January 2014, in accordance with section 21 (1) WpHG,
ADWAY Corp., Panama City, Panama, notified us that its share
of the voting rights in TOM TAILOR Holding AG fell below the
threshold of 5% on 24 October 2013, reaching 4.77 % on that
date. This corresponds to 1,241,000 voting rights. These voting
tence 1 WpHG, Allianz Global Investors Europe GmbH, Frank-
rights are attributed to it by Morgan Finance S.A. and Ar Mor 1
furt am Main, Germany, notified us that its share of the vot-
S.A. in accordance with section 22 (1) sentence 1 no. 1 WpHG.
ing rights in TOM TAILOR Holding AG exceeded the threshold
of 3% on 12 December 2013, reaching 3.07% on that date.
On 22 January 2014, TOM TAILOR Holding AG received a
Litman Gregory Masters International Fund
On 21 January 2014, in accordance with section 21 (1) sentence 1 WpHG, Litman Gregory Masters International Fund,
Deutsche Asset & Wealth Management Investment GmbH
Orinda, USA, notified us that its share of the voting rights
in TOM TAILOR Holding AG exceeded the threshold of 3% on
tence 1 WpHG, Deutsche Asset & Wealth Management Invest-
27 December 2013, reaching 3.01% on that date. This corres
ment GmbH, Frankfurt am Main, Germany, notified us that its
ponds to 782,751 voting rights.
share of the voting rights in TOM TAILOR Holding AG fell below
the threshold of 3% on 20 December 2013, reaching 2.66% on
that date. This corresponds to 692,011 voting rights.
DECL A R ATION OF COMPLI A NCE W ITH THE
G E RM A N CORP OR ATE G OV E RN A NCE CODE
The Management Board and Supervisory Board of TOM TAILOR
On 6 January 2014, TOM TAILOR Holding AG received
Holding AG issued the declaration required by section 161
of the Aktiengesetz (AktG – German Stock Corporation Act)
and made it available to the shareholders on TOM TAILOR
Holding AG’s website (http://ir.tom-tailor-group.com) in
Morgan Finance S.A.
December 2013.
TOM TAILOR Holding AG fell below the threshold of 5% on
FE E S OF THE AU DITOR S
(DI SCLOSU RE IN ACCORDA NCE W ITH
S EC TION 314 (1) NO. 9 HG B)
24 October 2013, reaching 4.77 % on that date. This corres
The fees recognised as an expense in financial year 2013
ponds to 1,241,000 voting rights.
amounted to EUR 227 thousand (of which EUR 37 thousand
Morgan Finance S.A., Luxembourg, Grand Duchy of Luxembourg, notified us that its share of the voting rights in
relate to 2012; 2012: EUR 206 thousand) for the audit of
Ar Mor 1 S.A.
the financial statements (including expenses), EUR40 thou-
sand (2012: EUR 3 thousand) for other assurance and val-
Ar Mor 1 S.A., Luxembourg, Grand Duchy of Luxembourg,
uation services, EUR46 thousand (2012: EUR 37 thousand) for
tax advisory services and EUR0 thousand (2012: EUR 8 thou-
Holding AG fell below the threshold of 5% on 24 Octo-
sand) for other services.
ber 2013, reaching 4.77% on that date. This corresponds to
to it by Morgan Finance S.A. in accordance with section 22 (1)
E V E NT S A F TE R THE E ND OF THE
RE P OR TING PE R IOD
sentence 1 no. 1 WpHG.
There were no events with a material effect on the net assets,
1,241,000 voting rights. These voting rights are attributed
financial position and results of operations of the Group after
the reporting date.
128
E XE MP TING CON SOLIDATE D FIN A NCI A L
S TATE ME NT S IN ACCORDA NCE W ITH
S EC TION 264 (3) A ND S EC TION 264 B HG B
PU B LIC ATION OF THE CON SOLIDATE D
FIN A NCI A L S TATE ME NT S
The Management Board approved the consolidated financial
The following consolidated German subsidiaries
statements prepared in accordance with IFRSs for publication
−Tom Tailor GmbH, Hamburg
on 23 February 2014.
−Tom Tailor Retail GmbH, Hamburg
− TOM TAILOR E-Commerce GmbH & Co. KG, Oststeinbek
−BONITA GmbH, Hamminkeln
−GEWIB GmbH, Hamminkeln
−BONITA Deutschland Holding Verwaltungs GmbH,
Hamminkeln
−BONITA E-commerce GmbH, Oststeinbek
− GEWIB GmbH & Co. KG, Pullach
plan to make use of the simplification options allowed by
section 264 (3) and section 264 b HGB regarding the man
Dieter Holzer
Dr Axel Rebien
agement report, as well as the publication of the documen
Chief Executive Officer Chief Financial Officer
tation relating to their annual financial statements.
The subsidiaries
-BONITA Deutschland Holding Verwaltungs GmbH,
Hamminkeln
−BONITA E-commerce GmbH, Oststeinbek
− GEWIB GmbH & Co. KG, Pullach
also exercise the simplification options regarding the
Chief Product Development
preparation of notes (including compulsory elective notes).
and Procurement Officer
C o n f i r m at i o n s
131Re s p on sibilit y S tate me nt
by the M a n ag e me nt Boa rd
132Au ditor s’ Re p or t
Confirmations
Responsibility Statement by the Management Board
131
R e s p o n s i b i l i t y S tat e m e n t
by the
Management Board
To the best of our knowledge, and in accordance with the
applicable reporting principles, the consolidated financial
statements give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Group, and the
Group Management Report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the material
opportunities and risks associated with the expected development of the Group.
Dieter HolzerDr Axel Rebien
Chief Executive Officer Chief Financial Officer
Chief Product Development
and Procurement Officer
Confirmations
Auditors’ Report
132
AUDITORS ’
REPORT
ENGLISH TRANSLATION OF THE INDEPENDENT AUDITORS’ REPORT
We have audited the consolidated financial statements
agement report are examined primarily on a test basis within
prepared by TOM TAILOR Holding AG, Hamburg, comprising
the framework of the audit. The audit includes assessing the
the consolidated income statement of financial position,
annual financial statements of those entities included in the
the consolidated income statement, the consolidated state-
consolidation, the determination of entities to be included in
ment of comprehensive income, the consolidated state-
consolidation, the accounting and consolidation principles used
ment of changes in equity, the consolidated statement of
and significant estimates made by management, as well as
cash flows and the notes to the consolidated financial
evaluating the overall presentation of the consolidated finan-
statements, together with the group management report
cial statements and the Group management report. We believe
for the business year from 1 January to 31 December 2013.
that our audit provides a reasonable basis for our opinion.
he preparation of the consolidated financial statements
and group management report in accordance with IFRS as
Our audit has not led to any reservations.
adopted by the EU, and the additional requirements of
German commercial law pursuant to §315 a (1) German Com-
In our opinion, based on the findings of our audit, the conso
mercial Code (HGB) are the responsibility of the legal
lidated financial statements comply with IFRSs as adopted by
representatives of the Company. Our responsibility is to
the EU and the additional requirements of German Commer-
express an opinion on the consolidated financial state-
cial Law pursuant to §315 a (1) HGB and give a true and fair view
ments and on the Group management report based on our
of the net assets, financial position and results of opera-
audit.
tions of the Group, in accordance with these requirements.
The Group management report is consistent with the con
We conducted our audit of the consolidated financial state-
solidated financial statements, as a whole provides a suitable
ments in accordance with §317 HGB (Handelsgesetzbuch;
view of the Group’s position and suitably presents the oppor-
“German Commercial Code”) and German generally accepted
tunities and risks of future development.
standards for the audit of financial statements promulgated by the Institute of Public Auditors in Germany (Institut der
Wirtschaftsprüfer – IDW). Those standards require that we
plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial
Ebner Stolz GmbH & Co. KG
position and results of operations in the consolidated financial
Wirtschaftsprüfungsgesellschaft
statements in accordance with the applicable financial
Steuerberatungsgesellschaft
reporting framework and in the Group management report
are detected with reasonable assurance. Knowledge of the
signed
business activities and the economic and legal environment
Thomas Götze
of the Group and expectations as to possible misstatements
Wirtschaftsprüfer
are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal
signed
control system and the evidence supporting the disclosures
Jürgen Richter
in the consolidated financial statements and the Group man-
Wirtschaftsprüfer
C o r p o r at e
Governance
135
135
Corp or ate G ov e rn a nce Re p or t
Corp or ate G ov e rn a nce S tate me nt in Accorda nce
w ith § 289 a of the H a nde l sg e s e t z bu ch
(HGB – G e rm a n Comme rci a l Code)
Declaration of Compliance in Accordance with § 161 of the Aktiengesetz
(AktG – German Stock Corporation Act)
136
Disclosures on Corporate Governance Practices
136
Working Practices of the Management Board and the Supervisory Board
140
Management Board and Supervisory Board Committees
141 Remuneration of the Management Board and the Supervisory Board
142Shareholdings
143
Directors’ Dealings
143Shareholders
143
Accounting and Transparency
144Re p or t of the Su pe rv i sory Boa rd
Corporate Governance
135
C o r p o r at e
Governance Report
Corp or ate G ov e rn a nce S tate me nt
in Accorda n ce w ith § 289 a of the H a nde l sg e s e t z bu ch
(HGB – G e rm a n Comme rci a l Code)
D e c l a r at i o n
Of Compliance
-In a departure from the recommendation contained in
section 5.1.2 of the German Corporate Governance Code
(“the Code”), the Supervisory Board has not currently
In Acco rda n ce W ith § 161
O f The A k tie ng e s e t z
( A k tg – G e rm a n S to ck Corp or ati on Ac t)
specified an age limit for the members of the Management
The Management Board and the Supervisory Board of
ment Board members would restrict the Supervisory Board’s
TOM TAILOR Holding AG submitted a declaration of compliance
options when selecting suitable members of the Manage-
Board above and beyond the universal retirement age
laid down in the Management Board employment contracts
because it believes that a general age limit for Manage-
ment Board. Although the Supervisory Board has not seen
in accordance with section 161 AktG in December 2013.
a reason to specify such a limit to date, it intends to deal
Text of the Declaration by the Management Board and
the Supervisory Board of Tom Tailor Holding Ag on
with this question when a concrete occasion arises.
-The Supervisory Board does not currently intend to form a
the German Corporate Governance Code in Accordance
nomination committee within the meaning of sec-
with Section 161 AktG (Declaration of Compliance)
tion 5.3.3 of the Code. Because it is composed of six mem-
TOM TAILOR Holding AG, Hamburg, Germany
bers, the Supervisory Board considers itself to be in a
ISIN: DE000A0STST2
position to appoint new members based on a suggestion
by the full Board, should this become necessary.
TOM TAILOR Holding AG has complied with the recommenda-
-In a departure from the recommendation contained in
tions of the Government Commission of the German Corporate
section 5.4.1 sentence 2, no age limit has been specified for
Governance Code published by the Federal Ministry of Justice
the Supervisory Board. TOM TAILOR Holding AG does not
in the Bundesanzeiger (Federal Gazette), most recently in the
consider restricting possible nominations by implementing
version dated 13 May 2013, with the exception of section 5.1.2
an age limit to make sense, as this would restrict the choice
of experienced candidates in particular.
(age limit for members of the Management Board), section 5.3.3
(formation of a nomination committee), and section 5.4.1 sen-

tence 2 (age limit for members of the Supervisory Board) since
it submitted its most recent declaration of compliance in
February 2013.
This declaration of compliance and all previous declarations
of compliance are published on TOM TAILOR Holding AG’s website
at http://ir.tom-tailor-group.com
Hamburg, December 2013
136
DIS C LOSURES ON
C ORPORATE GOVERNAN C E
PRA C TI C ES
WORKING PRA C TI C ES OF
AND THE
SUPERVISORY BOARD
RESPONSIBLE CORPORATE GOVERNANCE
TOM TAILOR Holding AG is the management holding company
TOM TAILOR Holding AG is a stock corporation established in
and parent of the TOM TAILOR GROUP. The various TOM TAILOR
accordance with German law. The legal framework for cor
Holding AG subsidiaries conduct the operating business
porate governance is therefore primarily provided by German
(the subsidiaries and TOM TAILOR Holding AG are also referred
stock corporation law, and in particular by the provisions
to jointly as “TOM TAILOR” or the “TOM TAILOR GROUP”).
governing the Management Board and the Supervisory Board.
TOM TAILOR Holding AG and its governing bodies are committed to good, responsible corporate governance. This philo
MANAGEMENT BOARD
sophy is shared by the entire TOM TAILOR GROUP.
The Management Board conducts TOM TAILOR Holding AG’s
business and represents the Company in dealings with third
In addition to compliance with these principles of good cor
parties. It manages the Company on its own responsibility
porate governance, company-specific guidelines and
and in the Company’s best interests with the aim of ensuring
standards also contribute to good, sustainable business
sustained value creation. The Management Board develops
performance at TOM TAILOR.
the corporate strategy, and manages and supervises its implementation. In addition, it ensures that all statutory provisions and applicable internal corporate guidelines are observed
(compliance). The Board has also implemented an internal
control and risk management system. This is an integral part
of its business processes and a key element in corporate decisions. The planning system, internal reporting and risk reporting are key components of this.
The Supervisory Board has adopted by-laws for the Management Board, which set out the transactions and measures for
which a resolution by the full Management Board is required,
as well as the principles for decision-making within the Management Board as a whole. In addition, the Supervisory Board
has listed a catalogue of transactions in the by-laws that may
only be performed with the approval of the Supervisory
Board. These include transactions and measures that have a
material effect on the net assets, financial position and
results of operations of the TOM TAILOR GROUP. As part of the
implementation of the provisions of the by-laws, the full
Management Board has adopted a schedule of responsibilities
that assigns responsibility for specific areas of activity to
individual members of the Management Board, without this
affecting the overall responsibility of the Management Board.
137
The Management Board currently consists of four members.
The members cooperate in a collegial manner and inform one
another on an ongoing basis about important measures and
events within their areas of responsibility. Generally speaking,
the Management Board passes resolutions in regular meetings.
Resolutions require a simple majority.
The members of the Management Board are Dieter Holzer
(Chief Executive Officer), Dr Axel Rebien, Udo Greiser and
Dr Marc Schumacher.
The members of the Management Board were appointed at
different times.
Appointment of Management Board Members
First appointment
Current appointment
Dieter Holzer
Born in 1964
Chief Executive Officer/CEO
Since 21 December 2007
Chief Executive Officer
of TOM TAILOR Holding AG
Since 2006
Member of the management
of Tom Tailor Holding GmbH
(legal predecessor of TOM TAILOR Holding AG)
Dr Axel Rebien
Born in 1971
Chief Financial Officer/CFO
Since 17 January 2008
Member of the Management Board
Since 2008
Chief Financial Officer/CFO
From 2005 to 2008
Head of finance at the former
Tom Tailor Holding GmbH
Udo Greiser
Born in 1957
Chief Product Development and
Procurement Officer/CPO
Since 1 March 2012
Until 28 February 2015*
Dr Marc Schumacher
Born in 1977
Chief Retail Officer/CRO
Since 21 June 2011
Until 30 June 2017
From 2008 to 2010
Head of the TOM TAILOR GROUP’s
retail unit
Until 31 January 2015
Until 31 January 2016
* Udo Greiser’s appointment as board member was terminated effective 28 February 2014 and he was appointed as managing director of BONITA GmbH.
The members of the Company’s Management Board do not
currently serve on the Board of Directors, Management Board
or Supervisory Board, or as members of comparable German
or foreign governing bodies outside the TOM TAILOR GROUP,
nor have they done so in the past five years.
138
SUPERVISORY BOARD
Andreas Karpenstein
The Supervisory Board of TOM TAILOR Holding AG advises
Partner and Managing Director of Raupach & Wollert
and supervises the Management Board in the management
Elmendorff Rechtsanwaltsgesellschaft mbH,
of the Company. The Supervisory Board is also responsible
Düsseldorf, Germany
for appointing the members of the Management Board, for
approving the annual financial statements and the consoli
Dr Christoph Schug
dated financial statements, and for engaging the Company’s
Businessman, Mönchengladbach, Germany
auditors.
Gerhard Wöhrl
The Management Board and the Supervisory Board of
Former CEO of Rudolf Wöhrl AG, Nuremberg, Germany
TOM TAILOR Holding AG work together closely and in an atmosphere of mutual trust for the benefit of the Company. The
Other Appointments of the Members
Management Board agrees the Company’s strategic orienta-
of the Supervisory Board
tion with the Supervisory Board and regularly discusses the
Uwe Schröder
status of the strategy’s implementation with it. The Manage-
(Chairman of the Supervisory Board)
ment Board informs the Supervisory Board regularly, promptly
–Chairman of the Verband der Fertigwarenimporteure e.V.
and extensively on all issues related to strategy, planning,
(VFI – Association of Non-Food Importers),
business development, the risk position, the internal control
Hamburg, Germany
and risk management system and compliance that are relevant for the Company. The Chief Executive Officer also regularly exchanges information with the Chairman of the
Supervisory Board between the Supervisory Board meetings.
–Member of the Advisory Board of Kassenhalle Restaurant
GmbH & Co. KG, Hamburg, Germany
–Managing Director of Schröder Consulting GmbH,
Flensburg, Germany
The Supervisory Board has adopted by-laws for itself. These
contain, among other things, detailed procedural rules for
its meetings and how they are to be chaired by the Chairman
–Managing Director of ALPHA Beteiligungsberatung
of the Supervisory Board, as well as rules on committee
GmbH & Co. KG, Frankfurt am Main, Germany
work.
–Managing Director of ALPHA Management GmbH,
The Supervisory Board consists of six members.
–Managing Director of ACapital Beteiligungsberatung GmbH,
Frankfurt am Main, Germany
Frankfurt am Main, Germany
In principle, the Supervisory Board’s period of office is five
years.
–Managing Director of Agrippina S.à.r.l.,
Luxembourg
–Managing Director of Bulowayo GmbH,
The members of the Supervisory Board are:
Königstein im Taunus, Germany
–Member of the Supervisory Board of Nero AG,
Uwe Schröder
Karlsbad, Germany
(Chairman of the Supervisory Board)
Co-founder of the TOM TAILOR GROUP, Hamburg, Germany
Andreas W. Bauer
− Managing Director of Titus Ventures UG
(haftungsbeschränkt), Munich, Germany
Managing Director of ALPHA Beteiligungsberatung
Andreas Karpenstein
GmbH & Co. KG, Frankfurt am Main, Germany
− Member of the Supervisory Board (Deputy Chairman)
of Trusted Advice AG, Wirtschaftsprüfungsgesellschaft
Andreas W. Bauer
Partner at Roland Berger Strategy Consultants,
Munich, Germany
Steuerberatungsgesellschaft, Düsseldorf, Germany
139
Dr Christoph Schug
For this reason, at least one member of the Supervisory Board
− Managing Director of Consulta Verwaltungs- und
should, if possible, be particularly qualified with respect to
Treuhand GmbH, Mönchengladbach, Germany
–Member of the Supervisory Board of Baden-Baden
Cosmetics Group AG, Baden-Baden, Germany
–Member of the Supervisory Board of Norma Group SE,
Maintal, Germany
the Company’s international activities. This means, for example,
that he or she should have long-term experience, preferably
gained outside Germany, of international business – in particular in TOM TAILOR’s core markets (Austria, Switzerland, the
Benelux countries and France).
–Member of the Board of Directors of AMEOS Gruppe AG,
Zurich, Switzerland
Diversity, in Particular an Appropriate Degree
of Female Representation
Gerhard Wöhrl
The composition of the Supervisory Board reflects the inter-
− Managing Director of Gerhard Wöhrl Beteiligungs
ests of the Company and must ensure effective supervision
gesellschaft mbH, Reichenschwand, Germany
–Managing Director of GOVAN Beteiligungs GmbH,
Reichenschwand, Germany
–Managing Director of GOVAN Holding GmbH & Co. KG,
–Managing Director of GOVAN Verwaltungs GmbH,
–Managing Director of GVC Gesellschaft
of and advice to the Management Board. Consequently, when
determining its composition, the Supervisory Board focuses
particularly on the knowledge, skills and specialist expertise
required to duly carry out these tasks. Additionally, the Supervisory Board believes that as a whole, its composition should
comply with the principles of diversity. In line with this, the
Supervisory Board strives for an appropriate degree of female
representation in particular.
für Venture Capital Beteiligungen mbH,
Munich, Germany
–Member of the Advisory Board of Sparkasse Nürnberg,
Nuremberg, Germany
–Member of the Advisory Board (Chairman) of TETRIS
Grundbesitz GmbH & Co. KG, Reichenschwand, Germany
–Member of the Advisory Board (Chairman) of TETRIS
If possible, at least one member of the Supervisory Board
should be a woman. When examining potential candidates, the
Supervisory Board should include qualified women in the
selection process and take them into account appropriately
when proposing candidates. Where multiple candidates are
considered to be equally qualified, the Supervisory Board shall
Grundbesitz Beteiligungsgesellschaft mbH,
examine whether a female candidate should be preferred in
order to facilitate an appropriate degree of female represen-
–Member of the Advisory Board of SinnLeffers GmbH,
Hagen, Germany
–Member of the Supervisory Board of SinnLeffers GmbH,
Hagen, Germany
tation. The Supervisory Board considers this level of female
representation to be appropriate with regard to the compos
ition of the Company’s other managers and in view of other
companies in the industry.

Composition of the Supervisory Board
Potential Conflicts of Interest
The Supervisory Board updated the objectives for its compo-
In selecting Supervisory Board members, the focus is on
sition in accordance with section 5.4.1 (2) of the German Corpo-
their knowledge, ability and specialist expertise; these qual
rate Governance Code on 1 February 2013. Taking into account
ities shall be given priority during the evaluation process.
the following objectives, the Supervisory Board is to be com-
In addition, the Supervisory Board shall take potential con-
posed in such a way that, taken as a whole, its members have
flicts of interest among its members into account when
the knowledge, skills and specialist expertise to duly carry out
determining its composition. Therefore, no persons should
their tasks.
be on the Supervisory Board who could probably have a
material and more than temporary conflict of interest.
International Orientation
In order to avoid from the start any potential conflicts of in-
TOM TAILOR Holding AG is an international fashion company
terest that could arise during their term of office, members
primarily active in the European market. The Supervisory
of the governing bodies of the Company’s major competitors
Board takes this international orientation into account with
should not be proposed.
respect to its composition.
140
Number of Independent Members of the Supervisory Board
The Executive Committee is responsible for preparing the
A Supervisory Board member is not considered to be independ-
Supervisory Board meetings and supervises the implemen
ent within the meaning of the Code in particular if he or she
tation of resolutions adopted by the Supervisory Board or its
has personal or business relations with the Company, its gov-
committees, as well as preparing and conducting prelimi-
erning bodies, a controlling shareholder, or an enterprise asso-
nary negotiations in connection with the signature, amend-
ciated with a controlling shareholder, that could give rise to a
ment and termination of contracts of service with Manage-
material and more than temporary conflict of interest. In view
ment Board members.
of this and given the size of this governing body, the Super
visory Board should have at least two independent members.
Members: Uwe Schröder (Chairman of the Executive Committee), Thomas Schlytter-Henrichsen
The Supervisory Board currently considers five of its members to be independent within the meaning of the Code.
The Audit and Finance Committee is responsible for the
Consequently, the independence of the Supervisory Board is
preliminary examination of the documents relating to the
sufficiently ensured.
annual financial statements and the consolidated financial
statements. It prepares the resolutions on the annual financial
Implementation of the Objectives
statements and the consolidated financial statements to
The Company’s interests must always be given preference
be passed by the full Supervisory Board as well as the Board’s
when implementing all of the objectives mentioned. In view
decision on the Management Board’s proposed resolution
of this, the Supervisory Board intends to implement the
on the utilisation of the net retained profits. The Audit and
objectives with respect to the appropriate degree of repre-
Finance Committee also prepares the Supervisory Board’s
sentation of women within the next five years as the oppor
proposal to the Annual General Meeting for the election of the
tunity arises. The Supervisory Board considers the remaining
auditors. Should the committee have at least three members
objectives to be met at this time.
and hence decision-making powers, it negotiates the fee with
the auditors, issues the audit engagement and specifies the
The members of the Supervisory Board include finance experts
areas of emphasis of the audit. Furthermore, it monitors the
(Dr Schug), a representative of the legal profession (Mr Karpen-
independence of the auditors. It is also responsible for super-
stein) and a management consultant (Mr Bauer), as well as rep-
vising the financial reporting process, the audit, any additional
resentatives of the fashion industry (Mr Wöhrl and Mr Schröder).
services performed by the auditors, the effectiveness of the
internal control system, the risk management system, compli-
Company founder Mr Schröder is the only member of the
ance and the internal audit system, as well as for discussing
Supervisory Board who has an indirect interest of more than
the quarterly and half-yearly reports with the Management
1% in the Company.
Board.
Members: Dr Christoph Schug (Chairman of the Audit and
MANAGEMENT BOARD
AND SUPERVISORY BOARD
C OMMITTEES
The Management Board has not currently established any
committees.
The Supervisory Board has established an Executive Committee and an Audit and Finance Committee to efficiently perform
its tasks. Both committees perform only advisory and pre
paratory tasks. They consist of two members each and do not
currently have any decision-making powers.
Finance Committee), Andreas Karpenstein
At least one independent member of the Supervisory Board
has expertise in accounting or auditing, in the person of the
Chairman of the Audit and Finance Committee.
1 41
REMUNERATION OF
AND THE
SUPERVISORY BOARD
ment Board. The MSP runs for a total of 14 years from the
date of the initial listing and serves to align the mutual
interests of the Management Board and the shareholders.
A detailed description of this remuneration system is pro
vided in the notes. Measurement of the MSP on 31 December
2013 resulted in remuneration entitlements of EUR 613 thou-
Designing remuneration systems for the Management Board
sand for Mr Holzer and of EUR 232 thousand for Dr Rebien.
and the Supervisory Board members that provide incen-
These remuneration entitlements will be paid out in 2014 at
tives and reward performance in an appropriate manner is a
the earliest.
key component of responsible corporate governance.
A Long-Term Incentive Programme (LTI) was introduced in July
REMUNERATION OF THE MANAGEMENT
BOARD MEMBERS
2010 for the TOM TAILOR GROUP’s management. It serves to
The remuneration paid to the Management Board members
The programme is also open to the members of the Manage-
comprises three components: a fixed basic remuneration
ment Board. The remuneration system runs for a period of eight
component, a variable remuneration component and a remu-
years (starting in financial year 2010) and grants an additional,
neration component based on the long-term performance
individual bonus based on a comparison of target and actual
of the Company and the share price.
retain personnel and achieve the Company’s long-term goals.
revenue and the operating result over a three-year obser
vation period in each case. Share price performance is another
The variable remuneration for the Management Board mem-
component that is taken into consideration. Measurement of
bers Mr Holzer, Dr Rebien, Dr Schumacher and Mr Greiser is
the LTI programme as at 31 December 2013 resulted in a total
based on the TOM TAILOR GROUP’s net sales figures and its
remuneration entitlement of EUR930 thousand for Mr Holzer,
recurring EBITDA. Dr Schumacher has an additional remu
EUR374 thousand for Dr Rebien, EUR237 thousand for Dr Schu-
neration component: the specific EBITDA performance in the
macher and EUR28 thousand for Mr Greiser. The portion from
retail segment. The Management Board members are per
the second tranche, which was issued in 2011, will become pay-
mitted to use their company cars for private purposes as a
able in 2014 (the first tranche became payable in 2013) and
fringe benefit. In addition, accident insurance has been taken
amounts to EUR 548 thousand for Mr Holzer, EUR213 thousand
out for Dr Rebien, Mr Greiser and Dr Schumacher and an en-
for Dr Rebien and EUR 131 thousand for Dr Schumacher. The
dowment policy has been taken out for Mr Holzer. In the event
remaining tranches from this remuneration system will be paid
that a member of the Management Board becomes unable to
out after certain prerequisites have been met, starting in 2015
work, his salary will continue to be paid for a maximum of six
at the earliest.
months; in the event of the death of a member of the Management Board, payments will continue for a maximum of twelve
months. If Mr Holzer’s contract is terminated he is entitled to
Holding AG resolved a Company stock option programme
receive a fixed severance payment in the amount of his fixed
in order to be able to grant stock option rights to members of
remuneration component for the remainder of his contract.
the Company’s Management Board, members of the manag
ement of affiliated companies and selected employees below
The variable remuneration components for financial year
Management Board level of the Company, and below man-
2013 are EUR 2,860 thousand for Mr Holzer, EUR655 thou-
agement level of affiliated companies (hereinafter referred to
sand for Dr Rebien, EUR 178 thousand for Dr Schumacher and
as the Long-Term Stock Option Programme). The associated
EUR 264 thousand for Mr Greiser. The fixed remuneration
performance targets are measured on the basis of a multi-year
components amounted to EUR 924 thousand for Mr Holzer,
assessment and comply with the legal requirements of the
EUR 594 thousand for Dr Rebien, EUR 268 thousand for
Aktiengesetz (AktG – German Stock Corporation Act) and the
Dr Schumacher and EUR 520 thousand for Mr Greiser.
German Corporate Governance Code. The stock option rights
may be exercised no earlier than four years after the date of
On 20 January 2010, the Supervisory Board resolved to im-
issue. The stock option rights have a maximum term of seven
plement a stock-based remuneration system (the Matching
years from the date of issue. A detailed description of this re-
Stock Programme, or MSP) for the members of the Manage-
muneration system is provided in the notes.
142
During the reporting period, a total of 485,000 of the 600,000
stock options available in 2013 were issued on 26 August 2013.
SHAREHOLDINGS
Of these, 100,000 stock options were issued to Dr Rebien and
per share for type A (75% of the options issued) and type B (25%
SHAREHOLDINGS OF THE MEMBERS
OF THE MANAGEMENT BOARD
of the options issued) option rights is EUR 3.39 and EUR 2.77,
The CEO, Mr Dieter Holzer, directly held 266,610 shares as
respectively. Expenses were incurred for the options in finan-
at the publication date of this annual report, corresponding
cial year 2013 in the amount of EUR 25 thousand for Dr Rebien
to 1.02% of the Company’s shares.
50,000 each to Dr Schumacher and Mr Greiser. The fair value
and EUR 13 thousand each for Mr Schumacher and Mr Greiser
due to the allocation of expenses to the periods until the
CFO Dr Axel Rebien directly held 20,000 of the Company’s
options can potentially be exercised.
shares as at the publication date of this annual report, corres
ponding to 0.08% of the Company’s shares.
REMUNERATION OF THE SUPERVISORY
BOARD MEMBERS
CPO Mr Udo Greiser directly held 4,000 shares as at the
publication date of this annual report, corresponding to 0.02%
of the Supervisory Board receive a fixed yearly remuneration
of the Company’s shares.
of EUR40 thousand (the Chairman receives EUR 150 thousand
tion for out-of-pocket expenses. This remuneration is payable
SHAREHOLDINGS OF THE MEMBERS
OF THE SUPERVISORY BOARD
after the end of the Annual General Meeting that receives and
Two members of the Supervisory Board, Mr Uwe Schröder
resolves on the approval of the consolidated financial state-
(Chairman) and Mr Thomas Schlytter-Henrichsen (Deputy Chair-
ments for the financial year in question.
man), have indirect interests in TOM TAILOR Holding AG.
and the Deputy Chairman EUR75 thousand), plus compensa-
Mr Schröder and close relatives had an indirect interest in the
Company of 4.77 % via Morgan Finance S.A., Luxembourg,
as at the publication date of this annual report. Mr SchlytterHenrichsen indirectly held 0.13% of the Company’s shares
through Bulowayo GmbH as at the publication date of this
annual report.
Dr Christoph Schug directly held 18,400 shares as at the
publication date of this annual report, corresponding to 0.07 %
of the Company’s shares.
Mr Andreas W. Bauer directly held 5,400 of the Company’s
shares as at the publication date of this annual report,
corresponding to 0.02% of TOM TAILOR Holding AG shares.
Mr Gerhard Wöhrl directly held 16,700 of the Company’s
shares as at the publication date of this annual report,
corresponding to 0.06% of TOM TAILOR Holding AG shares.
143
DIRE C TORS ’ DEALINGS
In accordance with section 15 a of the Wertpapierhandels
gesetz (WpHG – German Securities Trading Act), the members
of the Management Board and the Supervisory Board of
TOM TAILOR Holding AG as well as certain employees with
managerial responsibilities and any persons closely associated with these employees must disclose the acquisition and
sale of TOM TAILOR shares and any related financial instruments. This duty of disclosure exists if the value of the transactions by a person belonging to the above-mentioned group
of persons amounts to or exceeds EUR5,000; further details as
well as the individual transactions disclosed can be found at
http://ir.tom-tailor-group.com
SHAREHOLDERS
TOM TAILOR Holding AG received voting right notifications in
accordance with section 21 (1) of the WpHG from institutional
investors in Germany, the United Kingdom, Luxembourg and
the United States, among other countries.
A C C OUNTING
AND TRANSPAREN C Y
Information is regularly provided to the shareholders and
the public, in particular via the annual report containing
the consolidated financial statements, and the interim reports.
Our Group financial reporting is prepared in accordance
with International Financial Reporting Standards (IFRSs), as
adopted by the EU, ensuring a high degree of transparency
and international comparability.
144
Report of the
Supervisory Board
In financial year 2013, the Supervisory Board performed
members and senior executives. In addition, the Supervisory
its duties in accordance with the law and the Articles
Board addressed the agenda for the Annual General Meeting
of Association and advised and supervised the Management
on 3 June 2013.
Board in its management of the Company. The Management Board informed the Supervisory Board regularly,
The Supervisory Board discussed the figures for the first
comprehensively and promptly about the economic envi-
quarter of 2013 in its meeting on 3 June 2013. At the same
ronment, the Company’s situation and development,
time, the Supervisory Board addressed the restructuring
key financial figures, major transactions and risk manage-
of the BONITA subgroup at a company law level. The meeting
ment both orally and in writing. The timely provision of
also served as a preparatory meeting for the Annual General
information to the Supervisory Board was ensured at all
Meeting held on the same day.
times. The Management Board regularly participated in
Supervisory Board meetings and answered all of the Super-
In its meeting on 26 September 2013, the Supervisory Board
visory Board’s questions fully and in depth. The Super
addressed the figures for the first half of the year. Another
visory Board, and in particular the Chairman of the Super-
topic discussed at this Supervisory Board meeting was the
visory Board, were also in close written and oral contact
business development of the BONITA subgroup and the
with the Management Board outside of the regular Super-
acquisition of additional shares of TOM TAILOR South Eastern.
visory Board meetings and discussed questions relating
The Supervisory Board also discussed preparations for
to strategy, planning, business development, the risk situ-
the cash capital increase from authorised capital, which was
ation, risk management and compliance.
implemented in October.
Key focuses of the Supervisory Board’s work in the past year
The Supervisory Board meeting on 12 December 2013 ad-
were the integration of the BONITA subgroup, the restruc-
dressed the business situation as at the third quarter of 2012
turing of the existing bank finance and the acquisition of non-
and the monthly figures for October and November 2013,
controlling interests in existing joint venture companies, as
in line with its regular schedule, the approval of the budget for
well as preparations for a cash capital increase from authorised
2014, as well as the three-year planning for 2014 to 2016 and
capital.
the listing of the shares from the non-cash capital increase in
connection with the acquisition of the BONITA Group in 2012.
SUPERVISORY BOARD MEETINGS
In addition, the Supervisory Board discussed the acquisition of
The Supervisory Board addressed current business develop-
additional shares of TOM TAILOR Sourcing Ltd., Hong Kong,
ments and approved significant individual transactions, ex-
the Group’s purchasing company.
amined the reports by the Management Board and discussed
strategic corporate planning in four regular meetings. It also
CORPORATE GOVERNANCE
adopted resolutions and discussed topical issues in extra
In its meeting on 12 December 2013, the Supervisory Board
ordinary Supervisory Board meetings and conference calls as
resolved the 2014 declaration of conformity in accordance
necessary.
with section 161 of the Aktiengesetz (AktG – German Stock
Corporation Act) following extensive discussion. In connection
In its meeting on 18 March 2013, the Supervisory Board ap-
with this, the Supervisory Board addressed the future com
proved the annual financial statements and the consolidated
position of the Supervisory Board in depth and updated its
financial statements for 2012, thus adopting the annual finan-
concrete objectives in accordance with section 5.4.1 of
cial statements. The meeting also focused on the issuance of
the German Corporate Governance Code in the version dated
a borrower’s note loan to replace a bank loan, as well as prep-
13 May 2013. In doing so, particular consideration was given
arations for a stock option programme for Management Board
to the requirement contained in the recommendation to stip-
145
ulate a number of independent Supervisory Board mem-
In its meeting on 12 December 2013, the Audit and Finance
bers within the meaning of section 5.4.2 of the German Cor-
Committee addressed the current status of the preliminary
porate Governance Code. The declaration of conformity
examination for the audit of the annual financial statements
was made permanently available to shareholders on the
for 2013 and the areas of emphasis for the audit that had al-
http://ir.tom-tailor-group.com website on 17 December 2013.
ready been determined. An update was also provided on the
current status of the risk management and compliance system.
SUPERVISORY BOARD COMMITTEES
The Supervisory Board has established an Executive Commit-
The Executive Committee met on 18 March 2013, 3 June 2013,
tee and an Audit and Finance Committee, each comprising
26 September 2013 and 12 December 2013, immediately be-
two members.
fore the regular Supervisory Board meetings held on each of
these dates. All meetings dealt with personnel, remuneration
The Supervisory Board’s Audit and Finance Committee held
and strategy issues.
three regular meetings in 2013. The Audit and Finance ComIts meetings primarily served to discuss the financial state-
COMPOSITION OF THE SUPERVISORY BOARD
AND THE MANAGEMENT BOARD
ments and management reports of the Company and of the
The members of the Supervisory Board – Mr Uwe Schröder,
Group, as well as the interim reports. To the extent that this
Mr Thomas Schlytter-Henrichsen, Mr Andreas W. Bauer,
was necessary or relevant, these meetings were also attended
Mr Andreas Karpenstein, Dr Christoph Schug and Mr Gerhard
by representatives of the Company (usually the Chief Financial
Wöhrl – exercised their Supervisory Board mandates for the
Officer, the Finance Director and/or the General Counsel), the
entire year.
mittee also held extraordinary meetings and conference calls.
Chairman of the Supervisory Board, or the auditors.
There were no changes to the composition of the ManageThe meeting on 28 January 2013 addressed the ongoing audit
ment Board of TOM TAILOR Holding AG (Mr Dieter Holzer, Chief
of the financial statements for 2012 with respect to both the
Executive Officer, Dr Axel Rebien, Mr Udo Greiser and Dr Marc
Group and the BONITA subgroup. In this connection, the com-
Schumacher) in financial year 2013.
mittee also discussed the areas of emphasis of the audit, such
as integration issues, the risk management system and the
ACCOUNTING AND AUDITING
measurement of subsidiaries (impairment testing).
The annual financial statements and the accompanying
management report of TOM TAILOR Holding AG are prepared
The meeting on 26 September 2013 focused on the process to
by the Management Board in accordance with the Handels
be adopted for the audit of the annual financial statements
gesetzbuch (HGB – German Commercial Code). The consolidated
for 2013 and the planning process, as well as the current status
financial statements and the Group management report are
of the risk management and compliance system implemented
prepared in accordance with International Financial Reporting
at TOM TAILOR GROUP. In addition, the need to further increase
Standards (IFRSs) as adopted by the EU. The annual financial
the number of central administrative positions for commer-
statements, consolidated financial statements and the man-
cial functions (e.g. financial control, internal audit and tax) was
agement reports are audited by the auditor and examined by
discussed.
the Supervisory Board.
146
The annual financial statements, consolidated financial
of the audit at the meetings of the Audit and Finance Commit-
statements and management reports of TOM TAILOR Holding
tee and the full Supervisory Board on 13 February 2014 and
AG were audited by Ebner Stolz GmbH & Co. KG, Wirtschafts
24 March 2014 respectively, and were available to answer ques-
prüfungsgesellschaft Steuerberatungsgesellschaft. The audits
tions from the members in attendance. In its meeting on
were conducted in accordance with German auditing regu
24 March 2014, the Supervisory Board approved the auditors’
lations and the generally accepted standards for the audit of
findings without restriction and, based on the final results
financial statements promulgated by the Institut der Wirt
of its own examinations, found that it had no reservations to
schaftsprüfer. The International Standards on Auditing were
make. The Supervisory Board approved the financial state-
also observed as a supplementary measure. Unqualified audit
ments prepared by the Management Board. The annual financial
opinions were issued for all audits.
statements are thus adopted.
The annual financial statements, consolidated financial
The Supervisory Board would like to thank the Management
statements and the accompanying management reports of
Board and the employees for all their hard work.
TOM TAILOR Holding AG and the audit reports by the auditors were submitted to the Supervisory Board members for
examination. All documents were discussed and examined
Hamburg, March 2014
in detail by both the Audit and Finance Committee and the full
Supervisory Board. The auditors reported on the key results
The Supervisory Board
Additional
I n f o r m at i o n
149Fin a nci a l Ca le n da r
a nd ContaC t de ta il s
150
Future-oriented Statements
150
Publication Details
Additional Information
Financial Calendar and Contact Details
149
F i n a n c i a l Ca l e n d a r
a n d C o n taC t d e ta i l s
Financial Calendar
Date
Current Events
25 March 2014
Annual Report 2013
25 March 2014
Analyst Conference, Frankfurt, Germany
8 May 2014
Publication of Q1 Report 2014
27 May 2014
Annual General Meeting, Hamburg, Germany
6 August 2014
6 November 2014
Contac t de ta il s
TOM TAILOR Holding AG
Garstedter Weg 14
22453 Hamburg
Germany
Phone: +49 (0)40 589 56 0
Fax: +49 (0)40 589 56 398
[email protected]
www.tom-tailor-group.com
Investor Relations & Corporate Communications
Felix Zander
Head of Investor Relations & Corporate Communications
[email protected]
Phone: +49 (0)40 589 56 449
Fax: +49 (0)40 589 56 199
Erika Kirsten
Manager Investor Relations & Corporate Communcations
[email protected]
Phone: +49 (0)40 589 56 420
Fax: +49 (0)40 589 56 199
Future-oriented Statements
This document contains forward-looking statements,
which are based on the current estimates and assumptions
by the management of TOM TAILOR Holding AG. Forwardlooking statements are characterized by the use of words
such as expect, intend, plan, predict, assume, believe,
estimate, anticipate and similar formulations. Such statements are not to be understood as in any way guaranteeing that those expectations will turn out to be accurate.
Future performance and the results actually achieved by
TOM TAILOR Holding AG and its affiliated companies depend
on a number of risks and uncertainties and may therefore
differ materially from the forward-looking statements.
Many of these factors are outside TOM TAILOR Holding AG’s
control and cannot be accurately estimated in advance,
such as the future economic environment and the actions
of competitors and others involved in the marketplace.
TOM TAILOR Holding AG neither plans nor undertakes to
update any forward-looking statements.
Publisher
TOM TAI LOR Holding AG
Garstedter Weg 14
22453 Hamburg
Germany
This annual report is also available in German; in addition,
it can be accessed in German and English on the Internet
at http://ir.tom-tailor-group.com
The German version of this annual report is legally binding.
Date of Publication
25 March 2014
Editorial Office
MC Services AG
Munich
Germany
www.mc-services.eu
Concept, Design and Production
KMS TEAM GmbH
Munich
Germany
www.kms-team.com
Printing
Color Gruppe
Munich
Germany
www.color-gruppe.de
Photography
The rights to the images belong to TOM TAILOR GmbH.